(Alliance News) - Despite a slow start, the FTSE 100 managed to end Monday's session firmly in the green, helped by gains for oil majors and International Consolidated Airlines.
The FTSE 100 index closed up 42.50 points, or 0.6%, at 7,197.88. The FTSE 250 ended down 60.13 points, or 0.3%, at 19,420.24, and the AIM All-Share closed down 0.24 points, flat at 863.03.
The Cboe UK 100 ended up 0.7% at 12,209.20 the Cboe UK 250 closed down 0.2% at 17,350.05, and the Cboe Small Companies ended 0.2% lower at 10,820.03.
"Equity markets in Europe are showing modest gains as traders await the resumption of US-China trade talks on Thursday," said David Madden, market analyst at CMC Markets.
"The mood is one of cautious optimism even though it appears that China are not overly eager to strike a broad trade deal," he continued. "It was reported the Chinese government are not willing to compromise on topics like industrial policy as well as government subsidies, but that's not to say that progress can't be made in the talks."
Talks on Thursday in the US will be led by on the US side by Trade Representative Robert Lighthizer and Secretary of the Treasury Steven Mnuchin, while the Chinese delegation will be headed by Vice Premier Liu He.
"Topics of discussion will include forced technology transfer, intellectual property rights, services, non-tariff barriers, agriculture, and enforcement," the White House said in a statement.
In European equities on Monday, the CAC 40 in Paris ended up 0.5%, while the DAX 30 in Frankfurt rose 0.6%.
The euro stood at USD1.0992 at the European equities close Monday, firm against USD1.0973 at the same time on Friday.
European officials warned Monday that Britain's latest Brexit deal proposal doesn't go far enough to allow a breakthrough before next week's Brussels summit.
Johnson's envoy, senior diplomat David Frost, was in Brussels on Monday for more "technical talks", and Brexit minister Stephen Barclay travelled to the Hague to meet Dutch officials. But both heard that the latest British plans to impose alternative customs arrangements on Northern Ireland, to be reviewed every four years by the provincial assembly, is unlikely to convince.
In an interview with Le Monde, chief EU negotiator Michel Barnier warned that if London "does not come back with new proposals on the two serious problems we have indicated to them, I cannot see how we can move forward".
Despite the divisions, Frost is still meeting with EU officials for technical talks, but doubts remain that a workable Brexit deal text will be available by Friday. If it is not, European officials warn, there will be no time to get member states to sign off on it before October 17 and 18, the last scheduled European summit before Brexit day.
Meanwhile, legal action aimed at forcing the PM to send a letter requesting a Brexit extension has been dismissed by the highest civil court in Scotland.
The prime minister has so far said he will comply with the accord of the Benn Act, which demands an extension is requested if a deal is not in place before October 19, but still says Britain will leave the EU by Halloween regardless.
The pound was quoted at USD1.2321 at the London equities close Monday, firm compared to USD1.2302 at the close on Friday.
Stocks in New York were mixed at the London equities close, with the Dow Jones down 0.1%, the S&P 500 index also 0.1% lower, but the Nasdaq Composite up 0.1%.
In London, International Consolidated Airlines ended as the best performer in the FTSE 100, up 3.1% after reporting growth in September traffic.
Traffic, measured in revenue passenger kilometres, rose 0.8% to 24.64 billion from 24.44 billion in September 2018, with group capacity, measured in available seat kilometres, broadly flat at 28.90 billion.
Passengers carried rose by 0.6% to 10.64 million from 10.58 million, though in British Airways alone this fell by 8.1% year-on-year to 3.9 million passengers from 4.2 million.
The UK flag carrier has been mired in pilot strikes in recent months, and in September planned industrial action led to 2,325 flight cancellations.
Oil majors were also among the session's winners, tracking the price of Brent higher.
Brent oil was quoted at USD59.22 a barrel at the London equities close Monday, up from USD58.40 late Friday.
"WTI and Brent crude are higher this afternoon as traders look ahead to the US-China trade talks that will take place later this week. The unrest in Iraq – the second-largest oil producer in OPEC, has brought about supply concerns," commented Madden at CMC Markets.
BP shares closed up 1.7%, while Royal Dutch Shell 'A' shares ended 0.9% higher with 'B' shares up 1.0%.
In addition, tensions in the Middle East notched up as US troops started withdrawing from areas in north-eastern Syria along Turkey's border.
"It is time for us to get out of these ridiculous Endless Wars, many of them tribal, and bring our soldiers home," US President Donald Trump wrote in a series of tweets on Monday, justifying his decision to pull out US troops and pave the way for Turkey's assault.
The withdrawal came hours after the White House announced late Sunday that Turkey "will soon be moving forward with its long-planned operation into Northern Syria," in a stunning reversal of US policy.
In other commodities, gold was quoted at USD1,501.30 an ounce at the London equities close on Monday against USD1,504.05 at the close on Friday.
Towards the other end of London's blue-chip index was cruise operator Carnival, finishing down 1.0% after HSBC cut the stock to Hold form Buy.
In the FTSE 250, building materials stocks suffered following a profit warning from SIG.
SIG said the weakening of trading has accelerated over recent weeks and political and economic uncertainty has continued to increase. As a result, SIG said it is now anticipating significantly lower underlying profitability than previous expectations for 2019 in both the specialist distribution and roofing merchanting businesses.
In 2018, SIG reported group underlying pretax profit of GBP72.7 million and revenue of GBP2.68 billion.
SIG shares closed down 15%. Peers Grafton Group and Travis Perkins ended 4.3% and 2.0% lower respectively in a negative read-across from SIG's update.
In the UK company calendar on Tuesday, there will be a trading statement from low-cost airline easyJet, electronics distributor Electrocomponents and third quarter production from iron ore pellet producer Ferrexpo.
In the economic calendar on Tuesday, Japan's trade balance is at 0050 BST followed by a Chinese services PMI at 0245 BST. German industrial production is at 0700 BST and US producer prices at 1330 BST.
Markets in China will re-open on Tuesday, having been closed for the past week for the Golden Week holiday.
By Lucy Heming; lucyheming@alliancenews.com
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