UPDATE 2-UK shares tumble as Trump tariff tweet triggers trade fears

* FTSE 100 down 0.8%, FTSE 250 down 0.5%
* Blue-chips suffer third day of losses
* Oil companies among few gainers
* Ted Baker falls to lowest in more than a decade
* Ocado slips after bond issue

(Adds company news items, updates to closing prices)
By Shashwat Awasthi and Muvija M
Dec 2 (Reuters) - UK shares handed back gains to close lower
on Monday as a combination of U.S. President Donald Trump
setting off global trade worries and disappointing data from the
world's biggest economy doused the morning's cheer.
The FTSE 100 .FTSE ended down 0.8% on its third session in
the red, after rising by the same level earlier in the day,
while the mid-cap FTSE 250 .FTMC dipped 0.5%.
Still, UK stocks managed to outperform their European peers
owing to gains in oil companies on hints that OPEC and its
allies may agree to deepen output cuts at a meeting this week.
O/R
Trump's surprise plans to restore tariffs on U.S. steel and
aluminium imports from Brazil and Argentina dragged most other
stocks in to the red.
While estimate-beating factory data from China helped kick
off trading on a positive note as investors entered the final
month of the year, questions about the health of the world
economy were quick to return after U.S. figures missed
expectations.
All but two sectors recorded falls on the main board, with
losses led by a 7.4% fall in online grocer and technology
company Ocado OCDO.L after launching a convertible bond issue.
Burberry BRBY.L , which like other luxury retailers counts
Asia among its biggest markets, declined by 5% after data showed
Hong Kong's retail sales in October fell by their steepest on
record as anti-government protests spooked tourists and hit
spending.
Other news-driven moves saw small-cap Ted Baker TED.L fall
8% to its lowest level in more than a decade after the retailer
said it may have overstated inventory by as much as 25 million
pounds.
Hopes of a trade deal between Beijing and Washington were
kept in check after news website Axios reported over the weekend
that the deal was now "stalled because of Hong Kong
legislation". China's Global Times newspaper also reported last night that
Beijing's top priority in a preliminary deal was the removal of
existing tariffs. "It is hard to see the U.S. swallowing a very bitter trade
pill like that ... It is now becoming more apparent why the
talks have dragged on so long," OANDA analyst Jeffrey Halley
said.
That left markets with little to look forward to as a torrid
year, underlined by the U.S.-China trade war and Brexit
uncertainties, draws to a close.
Among few gainers on the mid-cap index was Tullow Oil
TLW.L , which climbed 4% on reports that the company had agreed
to sell stake in its Ugandan oil fields.

($1 = 0.7794 pounds)