British stocks boosted by decreasing trade tensions; global cues

UK shares jumped to their highest in more than a month on Wednesday, joining a broad global rally on hopes of an end to the U.S.-Sino trade row and as a positive update from Taylor Wimpey gave a much-needed boost to housebuilders. London's blue-chip bourse was up 0.7 per cent at 0850 GMT after hitting its highest since Dec. 6 and the mid-cap index was up 0.8 per cent at its loftiest since Dec. 5. European and Asian markets rallied after talks in Beijing with Washington over trade concluded earlier on Wednesday as the world's two largest economies tried to seek a truce to end a longstanding row.

A U.S. trade delegation member said "it's been a good one for us" and the Chinese foreign ministry said results of the negotiations will be released later. At home though, uncertainty over the UK's divorce from the European Union deepened ahead of next week's vote on the draft deal in Parliament. British Prime Minister Theresa May's government cautioned lawmakers on Wednesday that it was a delusion to think that the government would be able to negotiate a new divorce deal with the European Union if parliament voted down her deal due on Tuesday.

Her government suffered a defeat in parliament on Tuesday night when lawmakers who oppose leaving without a deal won a vote on creating a new obstacle to a no-deal Brexit. Still, housebuilders, one of the most battered sectors amid concerns about the slowing economy due to Bexit - led the gains on Wednesday after Taylor Wimpey maintained its 2018 results forecast and forecast solid 2019 sales. The shares were up 4.1 per cent, topping the blue-chip leader board and on track for their best day since July 2016, taking peers Persimmon and Barratt with them.

Sainsbury's shares slipped almost 3 per cent in early deals on a worse-than-expected fall in underlying sales in the key Christmas quarter. By 0856 GMT, they were down 0.75 per cent in choppy trading. The update comes just a day after peer Morrisons also missed sales forecast for the key period, while Tesco bucked the trend and led a rally after industry data covering the Christmas quarter sales.

Among mid-caps, IT infrastructure and service provider Softcat surged over 14 per cent after a positive trading update, while fashion retailer Ted Baker followed with a 6.4 per cent rise on higher retail sales in the holiday period. Baker Greggs also rose 5.1 per cent after it flagged a "very strong" finish to the year.

(With inputs from agencies.)