FTSE 100 rises as US-China trade talks boost European stocks
European stocks climbed this morning as investors were buoyed by optimism over trade talks.
Trade-sensitive technology stocks led the gains after the bell opened, with markets reacting to comments from China that its tariff negotiations with the US were progressing.
The FTSE 100 rose 1.25 per cent to roughly 7,380, shrugging off a series of profit warnings released to the market this morning.
IAG, Imperial Brands and Pearson all warned on profits today, but stocks encompassing a wide range of sectors helped lift the blue-chip index.
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Meanwhile, the pan-European STOXX 600 index climbed 0.5 per cent.
Stock markets have recovered some of their losses since Tuesday, when they suffered a wobble on the back on mounting uncertainty.
“Trade hopes have buoyed markets over the past twenty-four hours, as investors hope that the US-Japan deal might provide a more amenable atmosphere for talks between the US and China,” said Chris Beauchamp, chief market analyst at IG.
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He added: “The looming month- and quarter-end may also have something to do with the relative sanguine performance of equities, since the usual late September weakness has so far been confined to one day.”
The Chinese commerce ministry has said Beijing is currently in close communication with Washington and is preparing to make progress at trade talks in October.
A tit-for-tat tariff battle between the world’s two largest economies has driven investor anxiety in the last year, with uncertainty causing havoc across the global financial system.
David Madden, market analyst at CMC Markets, said: “Equity markets in Europe had a cautious start, but have pushed higher throughout the trading session, as optimism about the US-China trade situation has fuelled buying.”
He added: “Yesterday, President Trump claimed that a trade deal with China might be struck ‘sooner than you think’. We have heard this sort of commentary before, and it hasn’t always worked out, but the mood is upbeat nonetheless.
“President Trump has a habit of changing his tune when it comes to China, so some traders might remain sceptical of the remarks. China’s ministry of commerce said companies have made significant purchases of US soybeans as well as pork, and this added to the bullish move.”