FTSE 100 rises on reports that US and China nearing trade deal
The pound, meanwhile, fell following disappointing construction data.
London’s top index strengthened on Monday on investor confidence that the US is close to agreeing a new trade deal with China – which could be penned this month.
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The FTSE 100 closed 27.66 points, or 0.39%, higher at 7,134.39, while Germany’s DAX rose 0.05% and France’s CAC grew 0.46%.
David Madden, market analyst at CMC Markets, said: “Stocks are largely higher … due to the report that China and the US are close to reaching a trade deal. Sentiment has been improving for a number of weeks now, and the latest report said that both sides are considering reducing or even removing tariffs on each other’s goods.
“The trade stand-off between the two largest economies in the world has weighed on sentiment in recent months, and now it might be near its end”.
Meanwhile, the pound declined after data revealed that output in Britain’s construction sector contracted in February as anxiety surrounding the impending departure from the European Union continued to weigh on firms as they delayed making decisions on building projects.
The IHS Markit/CIPS UK Construction purchasing managers’ index (PMI) fell from 50.6 in January to 49.5 in February, which is the lowest reading in almost a year.
Mr Madden said: “The UK construction sector has enjoyed a good run in the past five years, and given the lack of clarity ahead of Brexit, it isn’t much of a surprise the industry cooled down”.
Sterling was down 0.22% against the US dollar at 1.318, but rose 0.27% versus the euro at 1.163 at the London market close.
In corporate news, Ray Kelvin resigned as chief executive of Ted Baker with immediate effect following harassment allegations.
Mr Kelvin, who also founded the retailer, was forced to take a leave of absence last year amid claims that he enforced a “hugging” culture at the company and that he massaged employees, kissed their ears and asked some to sit on his lap. Mr Kelvin denies all allegations of misconduct.
Ted Baker shares closed 90p higher at 1,982p.
Home shopping company Findel rejected the advances of Mike Ashley’s Sports Direct, saying the takeover offer undervalues the business.
It follows Sports Direct’s announcement of a £139.2 million takeover bid for the company as the retail tycoon continues his acquisition spree
Sports Direct shares rose by 1.6p to 274.2p, while Findel shares increased by 13p to 175p.
Insurance giant Aviva appointed Maurice Tulloch, the head of its international arm, as its new chief executive.
He will replace Mark Wilson, who is standing down after more than five years at the helm.
Aviva shares grew by 2.5p to 434.5p.
Online gaming group 888 Holdings has acquired the sports betting platform of Irish gaming firm BetBright for £15 million.
888 said the deal will strengthen its product and technology capabilities and will support the long-term development strategy for the firm’s sports arm.
888 shares fell by 3.3p to 176.6p.
Brent crude, the international benchmark, traded up 1.25% at 65.69 US dollars (£49.86).
The biggest risers on the FTSE 100 were Rightmove up 24.3p to 496.2p, NMC Health up 102p to 2,856p, DS Smith up 9.6p to 346.6p, and Rentokil Initial up 9.1p to 356.7p.
The biggest fallers on the FTSE 100 were International Consolidated Airlines Group down 29p to 574p, Fresnillo down 25p to 799p, GVC Holdings down 15p to 651p, and Vodafone down 2.88p to 131.36p.