UPDATE 1-Sino-U.S. trade deal optimism lifts UK's FTSE; Ted Baker rallies

Britain's blue-chip index rose on Monday as miners and financial firms were boosted by reports that China and the United States were nearing a trade deal while clothing retailer Ted Baker erased losses.

The FTSE 100 nudged 0.2 percent higher by 0952 GMT while the UK-focused midcaps were up 0.1 percent. Miners and financial stocks advanced on reports that Washington and Beijing were close to a trade deal to end a prolonged dispute that has hurt global economic growth.

That also helped industrial groups Ashtead and Melrose top the FTSE 100 leader-board. Property website operator Rightmove also jumped 5 percent after bullish comments from JP Morgan analysts following results last week.

The Wall Street Journal reported on Sunday that U.S. President Donald Trump and Chinese President Xi Jinping could reach a formal trade deal at a summit around March 27, raising hopes that an end to the protracted dispute could be in sight. "With all this positivity comes the risk that the market is buying on this rumour mill and is becoming more exposed should the good news not materialise. March could well come in like a lion and go out like a lamb," said Markets.com analyst Neil Wilson.

But markets trimmed losses slightly after data showed that activity in Britain's construction industry fell for the first time in almost a year last month amid Brexit uncertainty and a slowdown in the housing market. British Airways owner IAG slumped 3 percent. A trader said the airline had guided its free cash-flow forecast for 2019 lower following its results last week.

Ted Baker reversed course to rise 2.2 percent after dropping 5 percent as Ray Kelvin, the retailer's founder and chief executive officer, quit following allegations of misconduct relating to his habit of hugging business colleagues. "Ted Baker has grown steadily and has become a global brand and we do not see any change to the Group's long-term prospects," wrote Liberum analysts, calling his departure unfortunate yet understandable.

Daily Mail and General Trust advanced 4.7 percent to top the pan-regional STOXX 600 after plans to return all its shares in Euromoney Institutional Investor and 200 million pounds in cash to eligible shareholders. Shares in the Daily Mail newspaper publisher were on course for their biggest rise in more than eight months.

Syncona shares gained 3.1 percent on the midcap index after U.S. company Biogen agreed to buy Nightstar which is partly owned by the FTSE 250 constituent. Dragging the FTSE 250 was speciality chemical company Synthomer which slumped 9 percent after its full-year report. ($1 = 1.3296 Canadian dollars) (Reporting by Muvija M and Shashwat Awasthi in Bengaluru; Editing by Kirsten Donovan and Ed Osmond)

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)