UPDATE 1-LSE leads FTSE 100 lower as Hong Kong bourse nixes bid

* FTSE 100 down 0.1%, FTSE 250 down 0.2%

* LSE biggest blue-chip loser after HKEX cancels bid

* Recruiting firms slump after weak trading updates
(Adds news items, analyst comments, graphic, updates share
moves)

By Muvija M and Shashwat Awasthi

Oct 8 (Reuters) - Britain's main index fell on Tuesday,
dragged down by shares in LSE after the Hong Kong bourse dropped
its takeover bid, while weak updates from recruiters and budget
airline easyJet pressured midcaps.

The FTSE 100 erased early gains to slip 0.1% by 0750
GMT. Midcaps dipped 0.2%.

Ahead of U.S.-China trade talks this week, corporate news
dominated market moves with LSE falling 6% after Hong
Kong Exchanges and Clearing scrapped its unsolicited
$39 billion offer as it failed to convince LSE management.

LSE shares, which dropped to levels not seen since September
when HKEX first announced the takeover plans, are headed for
their steepest one-day decline since the 2016 Brexit referendum.

Recruiters PageGroup and Robert Walters
dropped 6.5% and 10.2%, respectively, after they revealed that a
host of macroeconomic troubles including the U.S.-China trade
war, Hong Kong protests and Brexit is hindering performance.

Rival Hays skidded 5.4% to the bottom of the midcap
index.

EasyJet was the biggest drag on the index with a
4.6% slide, despite a robust outlook for the current year as the
carrier said it expected capacity growth in 2020 at the lower
end of its historic range.

A trader blamed profit-taking for the share price fall in
easyJet, which said pilot strikes at rivals British Airways
and Ryanair would bump up its revenue.

"The disappointment around the guidance will give the shorts
a stick to beat them (easyJet shares) with... we think the
industry is in better shape and we are more bullish," Goodbody
analysts wrote.

British Airways owner IAG also lost 2%, while
smaller player Ryanair gave up 3.3%.

The Sino-U.S. trade talks, scheduled for Oct. 9 and 10,
could make or break stock market performance this week. However,
mixed signals from Washington, including expanding its trade
blacklist of Chinese companies, has done little to settle
investor nerves in the run up to the meetings.

Market participants are still licking their wounds after a
sell-off in global markets that had pushed the FTSE 100 to its
worst week in a year as growth worries and recession risks
peaked.

(Reporting by Muvija M and Shashwat Awasthi in Bengaluru,
additional reporting by Tanishaa Nadkar; Editing by Bernard Orr)