By Muvija M and Ambar Warrick
(Reuters) - The British bluechip index ended lower on Friday and broader stocks lost for the week amid new concern over whether Britain could avoid a hard exit from the European Union by the year-end.
The FTSE 100 index <.FTSE> closed 0.2% lower and shed 1.4% over the week, while the FTSE 250 index <.FTMC> inched higher for the day and lost 0.9% for the week.
Britain and the European Union made scant progress towards a deal on future ties in talks this week, and their chief negotiators blamed each other for the stalemate.
Concerns over a hard brexit bought in a new layer of anxiety for markets already reeling from the impact of the coronavirus.
British stocks have underperformed several of their global peers this year, with doubts over a recovery intensifying after the country's economy contracted by a record 20% in the second quarter.
"It feels like the market is gradually coming to the realisation that the world is going to have to live with COVID-19 for longer as countries which have emerged from lockdown experience localised flare-ups and a general increase in infections," Russ Mould, investment director at AJ Bell wrote in a note.
Consumer discretionary stocks were among the few gainers for the day after data showed British retail sales surged past their pre-coronavirus level last month, although concerns persisted over debt levels in the country.
HG Capital <HGT.L> rose 8.8% after announcing further investment in software firms Visma and Sovos.
(GRAPHIC: Weekly percentage gainers and losers on the FTSE 100 - https://fingfx.thomsonreuters.com/gfx/mkt/azgponbadvd/FTSE%20WEEK.PNG)
Oil and gas heavyweight BP PLC <BP.L> was one of the worst weekly performers on the FTSE 100, pressured by weakness in oil prices through the week.
Homebuilder Persimmon <PSN.L> outperformed its blue-chip peers for the week with a more than 5% gain after it said it would reinstate its dividend, making it one of the first UK-listed companies to bring back a dividend after the initial shock of the pandemic.
(Reporting by Muvija M in Bengaluru; Editing by Subhranshu Sahu and Angus MacSwan)