London close: Stocks rally on US-China tariff deal

(Sharecast News) - London stocks ended higher on Monday as investors welcomed news of a temporary trade agreement between the United States and China that will see a rollback of some tariffs.

The FTSE 100 index rose 0.59% to close at 8,604.98 points, while the FTSE 250 advanced 0.6% to 20,627.38 points.

In currency markets, sterling was last down 0.9% on the dollar to trade at $1.3196, while it gained 0.5% against the euro, changing hands at €1.1884.

"The weekend meeting between the US and China has yielded yet another 90 day pause, lighting a new fire under the market rally," said IG chief market analyst Chris Beauchamp.

"The rebound from the April low was beginning to look a little tired, but today's news has given it new life.

"The longer Wall Street continues to rebound, the harder it will be for investors to avoid putting money back to work in the US, even though worries remain that the data will start to deteriorate in the months to come."

Beauchamp noted that the news might be great for stocks, but for gold it meant more pain in the short-term.

"Gold prices tend to flatline in May and June, and hopes that a more practical approach to trade policy will prevail in Washington mean that one key plank of gold's rally has been removed, at least for the time being."

Markets rally on US-China deal, gold prices take a breather

Global markets rallied after the United States and China agreed to sharply reduce tariffs for a 90-day period, easing fears of an extended trade war.

The breakthrough, reached during talks in Geneva over the weekend, would see Washington lower tariffs on Chinese imports from 145% to 30%, while Beijing would cut its levies from 125% to 10%.

It marked the first formal engagement between the two economic powers since sweeping tariff measures were introduced in early April.

Officials from both sides characterised the talks as constructive.

US Treasury secretary Scott Bessent said the deal represented a commitment to more balanced trade and a mechanism for continued dialogue, while Chinese state media described the discussions as "candid" and "in-depth".

Analysts cautioned, however, that the ceasefire remained fragile, with any renewed tensions potentially reigniting market volatility.

In a separate development, US president Donald Trump announced new measures aimed at cutting prescription drug prices in the United States.

Signing an executive order on Monday, Trump accused pharmaceutical companies of giving foreign markets steep discounts and pledged to implement a "most-favoured-nation" pricing model to ensure Americans paid no more than the lowest global rates.

He warned of further action if US consumers did not see reductions of 30% to 80% in drug prices.

There were no major economic data releases on this side of the Atlantic on Monday.

Miners and import stocks rise, supermarkets fall on Cranswick farm footage

On London's equity markets, heavyweight mining stocks were among the leaders, buoyed by hopes of revived global trade and stronger commodity demand.

Glencore climbed 6.08%, Anglo American rose 5.54%, Antofagasta added 5.77%, and Rio Tinto advanced 3.68%.

Precious metals producer Fresnillo, however, fell 5.8% as gold prices declined in response to improving risk sentiment.

Asia-focussed bank Standard Chartered surged 8.24% on relief that tariffs would be cut for 90 days, with Raspberry Pi Holdings also jumping 9.62% as trade tensions eased.

Promotional products firm 4imprint Group gained 12.02%, recovering from March warnings that tariffs could impact sales.

Elsewhere, Ferrexpo rallied 8.21% on speculation of renewed peace talks between Russia and Ukraine.

On the downside, shares in Cranswick plunged 7.09% after the UK's major supermarket chains suspended supplies from its Northmoor Farm following reports of animal abuse.

Undercover footage obtained by the Mail on Sunday alleged multiple criminal acts at the facility, prompting immediate action from Tesco, Sainsbury's, Morrisons and Asda.

Shares in Tesco, Sainsbury's and Marks & Spencer fell 2.38%, 2.39% and 3.32% respectively.

Victrex dropped 6.85% following the release of interim results, while Hikma Pharmaceuticals lost 2.45% amid concerns over new US drug pricing reforms.

AstraZeneca, initially down, managed to edge 0.31% higher by the close.

Reporting by Josh White for Sharecast.com.