FTSE 100 clinches upward with positive trade deal between US, China


Devdiscourse News Desk | Updated: 08-01-2019 15:37 IST | Created: 08-01-2019 15:13 IST
FTSE 100 clinches upward with positive trade deal between US, China
U.S. Commerce Secretary Wilbur Ross predicted that Beijing and Washington could reach a trade deal that "we can live with" as officials from the world's two biggest economies resumed talks looking to end their trade dispute. (Image Credit: Twitter)
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UK shares jumped on Tuesday amid hopes of a trade deal between China and the United States and online grocer Ocado and supermarket chain Tesco led a revival in retailers after upbeat sales data, offsetting Morrisons' disappointing holiday update. The FTSE 100 and the mid-caps were up 0.7 per cent at 0927 GMT, with the FTSE 250 hitting its highest level in over a month in early trade.

U.S. Commerce Secretary Wilbur Ross predicted that Beijing and Washington could reach a trade deal that "we can live with" as officials from the world's two biggest economies resumed talks looking to end their trade dispute. "The decision by Chinese President Xi to send his top trade negotiator Liu He to the first day of medium level talks appears to have been interpreted as a statement of intent by the markets that China is serious about coming to a speedy arrangement," said CMC Markets analyst Michael Hewson.

Adding some cheer to the battered retail sector was sales data for the fourth quarter from Nielsen and Kantar Worldpanel, offsetting a gloomy Christmas trading update from Morrison. While the data showed that discount shops Aldi and Lidl gained market share, overall grocery sales in the 12 weeks to Dec. 30 rose 16 per cent, according to Kantar Worldpanel.

The sector rallied to Dec. 7 highs, led by Tesco after it chalked up a gain of 0.6 per cent in the three months. The data also lifted Ocado, Next and Marks & Spencer by more than 2 per cent. That comes after a handful of positive Christmas updates from Aldi UK and retailers Next and Dunelm brought back some appetite for consumer shares.

Morrison was at the bottom of the blue-chip index, down 3.7 per cent after the UK's No. 4 supermarket chain missed sales forecasts, the latest sign that shoppers have tightened their purse strings amid Brexit uncertainty. AIM-listed Footasylum also tumbled 14 per cent to a life low after it cut the forecast for the year, blaming challenging Christmas trading and weakening consumer sentiment that led to some of the "most difficult" business conditions in recent years.

Packaging stocks DS Smith and Smurfit Kappa were among the biggest gainers after Jefferies said it reckons the market is too negative on the sector and see an opportunity for a re-rating. On the mid-caps, a positive update from pub operator Greene King pushed its shares 4.4 per cent higher, while building material supplier SIG gave up 5.7 per cent after a fall in 2018 revenue. Boosting the mid-caps was industrial group Rotork that jumped nearly 6 per cent after a BAML upgrade while Electrocomponents also rose 4.3 per cent as Jefferies and UBS raised the rating. 

(With inputs from agencies.)

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