UK stocks bounce on hopes around US-China trade talks

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UK stocks bounce on hopes around US-China trade talks

Representatives from both countries are set to meet on Wednesday.


The President of the People’s Republic of China Mr Xi Jinping (PA)
The President of the People’s Republic of China Mr Xi Jinping (PA)

The FTSE 100 started to bounce back on Monday as investors held out hope for US-China trade talks later this week.

The UK’s blue chip index ended the day up 0.4% or 32.67 points at 7,591.26.

Across Europe, the French Cac 40 and German Dax ended the day up 0.6% and 1% respectively.

It marked a slight rebound after a rollercoaster ride for stocks a week earlier, when the FTSE 100 fell around 0.8% amid concerns that Turkey’s financial woes could impact Europe.

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Mining stocks were higher on Monday (PA)

David Madden, a market analyst at CMC Markets UK, said: “Equity markets are buoyant ahead of the US-China trade talks which commence on Wednesday.

“The US and China remain locked in a trade spat and given the slump in the Chinese stock market and the renminbi in recent months, you could argue the US has the upper hand.

“The Chinese authorities have instructed banks to beef up lending to exporters and for infrastructure projects as a way of keeping the economic momentum going. It is crucial that Beijing don’t come across as weak and a veneer of economic strengthen must be kept up.”

Mr Madden noted that mining stocks were in demand due to optimism around the meeting, with Rio Tinto up 11.5p at 3,717.5p, Anglo American up 20p at 1,554p, and BHP Billiton up 15.8p at 1,645.2p.

The pound was also trading higher, up 0.2% against the euro at 1.115 and 0.05% versus the US dollar at 1.276.

Data released by the Organisation for Economic Co-operation and Development (OECD) think tank on Monday revealed that the UK is the worst performer among member countries when tracking the lag between gross domestic product (GDP) growth and real household income per capita since 2010.

It means that while the UK economy has expanded, household pay has failed to keep pace.

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It was behind countries including France, Italy, Germany, the US and Canada.

Brent crude prices were up 0.7% at around 72.31 US dollars per barrel, recovering some ground after Iran reportedly said that no fellow Opec member should be able to take over another member’s share of oil output as agreed by the cartel.

The country is facing renewed sanctions by the US, impacting oil exports.

In UK stocks, Countrywide fell 0.12p to 14.48p. The struggling estate agent said it was shelving plans that could have seen senior bosses pocket millions after meeting top investors.

The group, which is tapping investors for an emergency £140 million in funding, had planned to pay out as much as £20 million to a trio of executives as part of changes to its remuneration policy.

Mulberry shares sunk nearly 30% or 169p to 400p as it warned profits could take a £3 million hit following the collapse of department store chain House of Fraser.

The company said it was suffering from flagging UK sales, including at House of Fraser where it operates 21 concessions and employs 88 people.

House of Fraser collapsed into administration a week and a half ago, before being snapped up by Mike Ashley’s Sports Direct, but it is unclear how many stores he will keep or what terms will be offered to concession partners.

The biggest risers on the FTSE 100 were Evraz up 13.1p at 479.7p, Melrose Industries up 5.7p at 226.8p, Paddy Power Betfair up 155p at 7,110p, and easyJet up 32.5p at 1,607p.

The biggest fallers were Sage Group down 46.6p at 619.2p, Kingfisher down 3.1p at 270.2p, Berkeley Group Holdings down 41p at 3,696p, and United Utilities Group down 7.8p at 744.4p.

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