UPDATE 2-London stocks fall as Brexit, coronavirus concerns weigh

(For a Reuters live blog on U.S., UK and European stock
markets, click LIVE/ or type LIVE/ in a news window)

* Johnson Matthey slips as half-year profit slumps

* Direct Brexit talks suspended after EU team member tests
COVID
positive

* Royal Mail jumps on raising annual revenue outlook

* Kingfisher dips as Q4 sales growth slows

* FTSE 100 down 0.8%, FTSE 250 falls 1%
(Adds comment; updates share prices)

By Devik Jain

Nov 19 (Reuters) - London stocks slipped on Thursday, as
uncertainty over a post-Brexit trade deal with the European
Union and surging COVID-19 infections sparked fears of more
damage to an already-faltering domestic economic recovery.

The blue-chip FTSE 100 index closed 0.8% lower, with
chemicals maker Johnson Matthey Plc tumbling 5.6% after
it posted a near 90% slump in half-year profit and refrained
from providing an outlook for 2021.

Cyclicals such as banks, energy,
and mining stocks were among the biggest drags to
the index.

The domestically focused mid-cap FTSE 250 index
ended 1% lower.

After jumping more than 13% in the last two weeks on
optimism over a vaccine, the FTSE 100 index retreated this week
on concerns that swiftly accelerating COVID-19 cases and a
stalemate over a Brexit deal might derail a nascent economic
recovery.

"The reality has hit home for investors that we are seeing
greater disruptions especially in areas of Europe, which partly
was to be expected, given that we are going into winter," said
Azad Zangana, senior European economist and strategist at
Schroders.

"The FTSE 100 is a very unloved market right now, and once
the stigma attached to the UK is removed by the certainty of a
trade deal, we might see more of a return to normal in terms of
investors putting some money back towards the UK."

Chief Brexit negotiators suspended direct talks on Thursday
after a EU team member tested positive for COVID-19, with a
Finnish EU minister saying talks were at "critical stage" but
could still succeed.

Outsourcer Mitie Group slipped 6.6%, after it posted
a 35% fall in first-half profit and scrapped its interim
dividend.

Home improvement retailer Kingfisher Plc fell 2.7%
after saying fourth-quarter underlying sales growth has slowed
so far.

Royal Mail Plc jumped 3.3%, after raising its annual
revenue forecast due to an online shopping boost.
(Reporting by Devik Jain in Bengaluru; Editing by Bernadette
Baum)