LONDON MARKET MIDDAY: Equities Climb But Gold Tumbles After G20 Summit

(Alliance News) - London stocks started the week with a boost from the G20 summit as the US and China agreed to press pause on their ongoing trade spat in order to resume negotiations. The news saw equities across Europe climb on Monday, with Wall Street also pointed towards a cheery start, while gold tumbled on the return of this risk-off attitude to markets. The FTSE 100 index was up 89.59 points, or 1.2%, at 7,515.22 Monday midday. The FTSE 250 was up 169.72 points, or 0.9%, at 19,631.82, while the AIM All-Share was down 0.2% at 917.03.The Cboe UK 100 index was up 1.1% at 12,744.18. The Cboe UK 250 was up 0.8% at 17,545.04, while the Cboe UK Small Companies up 0.3% at 11,325.69.In mainland Europe, the CAC 40 in Paris and DAX 30 in Frankfurt were up 0.9% and 1.4% respectively in afternoon trade."The G20 meeting managed to deliver for markets, as Donald Trump avoided levying any further tariffs and instead laid out a plan to get the US-China trade talks back on track," said Joshua Mahony, senior market analyst at IG.Over the weekend, US President Donald Trump said he would hold off on his threat to slap additional tariffs on USD325 billion worth of Chinese imports "for at least the time being."He said the meeting with Chinese President Xi Jinping was "excellent" and that "we're right back on track" with trade talks following the highly anticipated encounter in the Japanese city.Trump also said that he would allow US companies to sell their products to Chinese firm Huawai, but that granting the telecommunications giant access to the US market would be dealt with further down the line, if talks progress."Sharp gains throughout Asia certainly provided European markets with a guide, while the S&P 500 futures point towards a record high open this afternoon," said Mahony. "There is plenty reason to be optimistic for markets, for with a US-China deal back on the cards, we still have a bout of monetary easing to look forward to from the eurozone and US."In the US, the Dow Jones is pointed to open 1.0% higher while the S&P 500 is seen climbing 1.1% and the Nasdaq up 1.7%. It was a less buoyant session for the pound, which slipped following some disheartening UK manufacturing data.Data from IHS Markit showed the Chartered Institute of Procurement & Supply UK Manufacturing Purchasing Managers' Index fell to 48.0 points in June from 49.4 in May, sinking further below the 50 mark which separates contraction from expansion. Capital Economics said the PMI has heightened downside risks to its second quarter GDP forecast."The upshot is that a hangover from Brexit preparations in the manufacturing sector and the slowdown in the global economy will weigh on GDP in Q2. We have pencilled in a 0.1% quarter-on-quarter contraction in GDP in Q2, but the manufacturing PMI probably increases the risks to the downside," said Capital Economics.There were also soft manufacturing figures over in mainland Europe, as activity weakened in June.IHS Markit showed the Eurozone Manufacturing PMI fell to 47.6 points in June, comfortably below the 50 point mark which separates contraction from expansion. The final June print was weaker than both the 47.7 reported in May and the 47.8 indicated in the flash reading for June published earlier. Germany - the largest eurozone economy - remained the weakest performer with a 45.0 points reading in June, despite hitting a four month high. Although up from the 44.3 reported in May, it was lower than the 45.4 flash estimate for June published earlier. Elsewhere in Europe, EU leaders have failed to agree on top appointments and talks are suspended until Tuesday.EU leaders have been trying to hash out a package of top jobs, centred on the nomination of the next European Commission president - a position for which Dutch socialist Frans Timmermans emerged as a surprise last-minute favourite. The meeting will reconvene on Tuesday at 11 am local time, Tusk's spokesman Preben Aamann announced on Twitter.With risk-on sentiment returning following the G20 summit, safe haven asset gold found itself slipping below the USD1,400 mark as investors flocked back to equities. An ounce of the precious metal was quoted at USD1,389.53 Monday midday, down from USD1,411.62 late FridayIn step with this fall, Mexican gold miner Fresnillo was the worst performer in the FTSE 100, down 3.4%. In contrast, oil majors were among the risers as the price of Brent rose after OPEC kingpin Saudi Arabia and non-member Russia agreed to keep daily oil output caps.Ministers from the 14-nation Organization of the Petroleum Exporting Countries meet in Vienna on Monday to discuss output, before gathering a day later for OPEC plus, which is a grouping of 24 oil-producing countries that includes Russia and accounts for almost half of global crude.However, Russian President Vladimir Putin and Saudi Arabia grabbed the headlines on Saturday with an agreement to extend a deal which aims to keep oil output low in order to soak up abundant supplies.The news saw BP rise 2.0% and Royal Dutch Shell 'A' and 'B' shares both climb 1.9%. Elsewhere among the blue-chips, DS Smith gained 1.7% after completing the sale of two packaging businesses in north west France and in Portugal to Memphis, Tennessee-based peer International Paper for EUR63 million. DS Smith said the sale honours the commitment made to the European Commission in relation to the clearance of its acquisition of Spanish packaging firm Europac, which completed in January.British Airways parent International Consolidated Airlines fell 1.1% after Bernstein cut the firm to Market Perform from Outperform.Boosting the FTSE 250 index was new member Future, up 8.4% after the magazine publisher said its annual results will be ahead of expectations, underpinned by good audience growth within the Media division and the continued strong performance of recent acquisitions. London Midday is available to subscribers as an email newsletter. Contact info@alliancenews.com