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(Alliance News) - Stocks in London ended higher on Thursday as the US and Chinese trade delegations opened a new round of talks in Washington in a bid to end their gruelling trade spat.
US President Donald Trump also announced Thursday he will meet with China's top trade envoy as the two sides pursue fraught negotiations that this week appeared to be headed for a dead end.
Trump announced on Twitter he plans to meet Friday with Vice Premier Liu He, who is leading the Chinese delegation, as officials returned to the negotiating table amid a blitz of aggressive US manoeuvrers.
Just since Monday, Washington has slapped visa restrictions on senior Chinese officials and blacklisted more than two dozen Chinese firms, accusing them of persecuting ethnic Muslims in China's western Xinjiang region.
"Big day of negotiations with China. They want to make a deal but do I?" Trump said on Twitter. "I meet with the vice premier tomorrow at the White House."
The FTSE 100 index closed up 19.86 points, or 0.3%, at 7,186.36. The FTSE 250 ended up 64.12 points, or 0.3%, at 19,235.72, and the AIM All-Share closed marginally higher at 856.28.
The Cboe UK 100 ended up 0.4% at 12,207.15, the Cboe UK 250 closed up 0.4% at 17,152.25, and the Cboe Small Companies ended up 0.2% at 10,799.34.
In European equities, the CAC 40 in Paris ended up 1.3%, while the DAX 30 in Frankfurt closed up 0.6%.
IG Group's Josh Mahony said: "Global markets are on the rise as we close out the European session with green across the board. Sentiment was always likely to be dominated by today's US-China trade talk, and the past 24 hours have proven difficult for traders amid a raft of conflicting rumours. However, the biggest piece of good news for markets thus far came in the form of a Trump tweet which set out plans for him to meet Liu He tomorrow."
"Markets certainly perceive the meeting as an additional opportunity for the deadlock to be broken. Despite US rejection of Chinese plans for a partial deal, rumours the US could consider a currency pact to stave off impending tariffs at least points to some form of de-escalation," Mahony added.
Trump's announcement sent US stocks in the green, calming fears after an overnight news report said the Chinese side could leave early given the slim progress in preliminary talks.
Stocks in New York were higher at the London equities close, with the DJIA, the S&P 500 index, and the Nasdaq Composite up 0.8%, 0.9%, and 0.9% respectively.
On the London Stock Exchange, miners ended among the blue chip risers amid the improved trade war sentiment.
Antofagasta closed up 4.5%, Anglo American up 4.0%, Glencore up 3.2%, Rio Tinto up 2.7% and BHP up 2.0%.
Analysts at FXPro explained: "There is increased nervousness on the markets amid US-China trade talks restart. It caused quite wild swings during the Asian trading session. Thus, the UK mining sector felt better at the start of the London session despite the overall drawdown of the FTSE 100 following an increase in commodity prices.
"Copper added more than 1% today on the strengthening of demand for risky assets in emerging markets due to growing hopes for at least an intermediate Sino-US trade deal."
"Anglo American and Antofagasta, the FTSE 100's mining industry blue-chips, carry out a significant portion of their business outside of the UK, in South Africa, and Chile, respectively. So they feel better on the prospects of the trade deal," they continued.
At the other end of the large cap index, Barratt Developments ended the worst performer, down 4.5%, after the stock went ex-dividend meaning new buyers no longer qualify for the latest payout.
In the FTSE 250, Dunelm ended the worst performer, down 10% despite the homeware retailer reporting positive first quarter earnings.
Revenue in the 13 weeks to September 28 rose 5.8% to GBP262.6 million from GBP248.2 million last year. Not including GBP4.0 million in sales from Worldstores.co.uk and Kiddicare.com - websites that closed in the first quarter last year - revenue grew by 7.5% from GBP244.2 million.
The beginning of the quarter was particularly strong, Dunelm said, reflecting continued market share gains and a weak comparative period last year. In September, however, trading was mixed amid a softer homewares market.
"The home furnishings chain defied retail gloom to post a series of positive trading updates earlier in 2019 but the stalling share price suggests the strong performance has already been priced in by the market," said AJ Bell's Russ Mould.
The stock is up 35% so far in 2019.
The pound was quoted at USD1.2306 at the London equities close, up from USD1.2222 at the close Wednesday, amid a modicum of progress in Brexit discussions.
UK Prime Minister Boris Johnson and his Irish counterpart Leo Varadkar said they can "see a pathway" to a possible Brexit deal.
The Irish and other EU governments have objected to proposals to take Northern Ireland out of the EU customs union, along with the rest of the UK, meaning the return of customs checks on the island of Ireland.
Following more than two hours of talks at a country manor in Merseyside, the two leaders said they believed a deal was "in everybody's interests".
In a joint statement, Johnson and Varadkar said they would now "reflect further" on their discussions while their officials would continue to "engage intensively".
The euro stood at USD1.1004 at the European equities close, up from USD1.0982 a day before.
Against the yen, the dollar was trading at JPY107.88, up from JPY107.40 late Wednesday.
On the US economic front, inflation was flat in September, disappointing economists, figures from the US Bureau of Labor Statistics showed on Thursday.
Consumer prices displayed no month-on-month growth in September, after a 0.1% rise in August. Market consensus were for prices to edge up another 0.1% in September.
On an annual basis, prices were up 1.7%, in line with August's reading but again disappointing forecasts for a 1.8% rise.
Brent oil was quoted at USD58.75 a barrel at the London equities close from USD58.54 at the close Wednesday.
Oil prices were helped by comments from Mohammed Barkindo, OPEC secretary-general, who did not appear to rule out deeper oil production cuts for the cartel and its allies at the upcoming meeting in December to set supply for 2020.
Speaking on the sidelines of the Oil & Money conference, Barkindo said "at the moment, all options are open", when quizzed about the prospect for deeper cuts being agreed at OPEC's next meeting in Vienna.
Oanda analyst Edward Moya said: "Barkindo's comment reminded markets that if oil prices do not fall off a cliff over demand concerns, we could very see OPEC+ extend their production cuts throughout the majority of 2020.
"If oil prices (Brent) fell below USD50 a barrel many oil traders were expecting Saudis and Russians to abandon the production cut agreement. Once the production cuts completely lose their effectiveness in supporting prices, it is pointless to continue giving up oil revenue."
"Oil could get a double dose of good news this week if we see a mini-trade deal support the demand side and geopolitical risks keep tightness with supplies," Moya added.
Gold was quoted at USD1,493.91 an ounce at the London equities close, down from USD1,507.45 late Wednesday.
"Gold prices have been hit hard after the breaking news Trump is going to meet Chinese vice premier. Basically, this has increased the odds of a better deal taking place and this is exactly what investors have hoped," said ThinkMarkets analyst Naeem Aslam.
The economic events calendar on Friday has Germany inflation readings at 0700 BST.
The UK corporate calendar on Friday has third-quarter results from midcap fund managers Man Group and Jupiter Fund Management.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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