FTSE 100 soars as fears ease over US-China trade war
The FTSE 100 Index closed up 111.45 points to 7,000.14,
More than £28 billion has been added to the value of London’s blue-chip stocks as investors were buoyed by signs that US and China would avoid a trade war.
Weekly Business Digest Newsletter
The FTSE 100 Index broke its losing streak and climbed above the 7,000 mark after the two nations said they were open to negotiation.
It comes just days after US President Donald Trump signed an order paving the way for the imposition of wide-ranging tariffs on imports from China worth 60 billion dollars (£43 billion).
Such was the relief in London that the top-tier closed up 111.45 points to 7,000.14, with Ferguson emerging as the biggest riser after the plumbing and heating specialist unveiled a £1 billion special dividend.
European markets were also on the up, with Germany’s Dax surging 1.6% and the Cac 40 in France pushing 1% higher.
On the currency markets, the pound dropped back as cooling tensions between America and China caused the US dollar to strengthen.
Sterling was 0.5% lower versus the US dollar at $1.415. Against the euro, the UK currency dropped 0.2% to 1.140.
The price of oil remained in positive territory, lifting 0.2% to $70.14 a barrel, on the prospect of Opec production cuts being extended to 2019.
In UK stocks, pharmaceutical colossus GlaxoSmithKline was among the standout performers after agreeing a 13 billion US dollar (£9.2 billion) deal to buy Novartis’s stake in its consumer healthcare joint venture.
Glaxo will snap up the 36.5% stake to take full ownership of the division just a week after it pulled out of the bid auction for US group Pfizer’s consumer healthcare business amid a shake-up in the sector.
The companies only launched the joint venture in 2015, but Swiss group Novartis said the deal was at an “attractive price”, while Glaxo said it would allow the group to “capture the full value” of the business.
Shares surged 5%, up 62.8p to 1,351p, with the deal expected to be completed in the summer.
On the second tier, Superdry founder Julian Dunkerton announced his departure and plans to donate £1.2 million in shares to charity, sending the retailer’s stock price into the red.
Shares were off more than 6%, or 109p to 1,543p, as Mr Dunkerton said he would leave his director position by March 31. He said a tranche of ordinary shares would be donated to sea protection charity, The Blue Marine Foundation.
Elsewhere on the FTSE 250, AG Barr marched higher after the soft drinks maker hiked investor payouts on the back of a sparkling annual performance.
The Irn-Bru maker reported a 4.2% rise in statutory pre-tax profits to £44.9 million for the year to January 27, on an 8% rise in revenues to £277.7 million.
That is despite the impact of the weak pound, which has driven up the costs of sugar and packaging that are priced in euros, and headwinds caused by economic volatility and Brexit uncertainty. Shares in AG Barr rose 11p to 626p.
The biggest risers on the FTSE 100 Index were Ferguson up 344p to 5,478p, GlaxoSmithKline up 62.8p to 1,351p, Shire up 116.5p to 3,070p, Scottish Mortgage Investment Trust up 15p to 455p.
The biggest fallers were Next down 78p to 4,797p, Randgold Resources down 80p to 5,916p, Fresnillo down 12p to 1,251p, Royal Bank of Scotland down 0.9p to 257.6p,