U.K. stocks rose on Monday, on track for a record closing high, as traders welcomed news over the weekend that China and the U.S. reached an agreement that eases trade tensions between the world��s two largest economies.
That optimism also sparked a rally in the dollar, which in turn pulled the pound lower. That further helped lift the British stock market.
What are markets doing?The FTSE 100 index UKX, +0.85% �rose 0.6% to 7,824.42, setting it on track to take out its previous closing high of 7,787.97, hit last Thursday.
The pound GBPUSD, -0.4901% �fell to $1.3414 from $1.3466 late Friday in New York. A weaker pound tends to boost the FTSE 100, as the index��s components make the bulk of their earnings overseas and a softening in sterling lifts revenues when converted back into the U.K. currency.
What is driving the market?The upbeat trading mood in stocks came after Beijing and Washington agreed to drop their tariff threats. U.S. Treasury Secretary Steven Mnuchin said on Sunday that the U.S. administration would put the trade war with China ��on hold�� while the two countries work on a deal to reduce the U.S.��s trade deficit with the Chinese. Meanwhile, China agreed to buy more U.S. products, but without specifying a dollar amount.
What are strategists saying?��It looks like progress on talks between China and the U.S. means we are not about to descend into a punitive trade war. Whilst there is still long way to go, and nothing is agreed until everything is agreed, there has undoubtedly been solid progress and the sense of relief in equity markets is palpable,�� said Neil Wilson, chief market analyst at Markets.com.
��But we must note that the FTSE��s gains of late are probably more attributable to a weaker pound as the dollar rallies across the board,�� he added.
Which stocks are in focus?Shares of AstraZeneca PLC AZN, +2.48% AZN, -0.30% �rose 1.7% after the drug giant said the U.S. Food and Drug Administration has approved Lokelma for the treatment of adults with hyperkalemia.
International Consolidated Airlines Group SA IAG, +1.14% ICAGY, -0.81% �added 0.8% after reports the British Airways-parent is planning to make a ��1.52 billion offer for Norwegian Air Shuttle ASA NAS, -7.43% �.
In Ireland, Ryanair Holdings PLC RY4C, +3.78% RYAAY, +1.76% �slipped 0.2% after the budget airline warned on 2019 profit due to higher oil prices and pressure on fare prices.
Related Topics United Kingdom London Stock Exchange London Markets Bank of England Europe European Markets Quote References UKX +66.29 +0.85% GBPUSD -0.0066 -0.4901% AZN +130.00 +2.48% IAG +7.80 +1.14% ICAGY -0.15 -0.81% NAS -20.10 -7.43% RY4C +0.59 +3.78% RYAAY +1.94 +1.76% Show all references MarketWatch Partner Center Most Popular
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Sara Sjolin Sara Sjolin is a MarketWatch reporter based in London. Follow her on Twitter @sarasjolin.
Sara Sjolin Sara Sjolin is a MarketWatch reporter based in London. Follow her on Twitter @sarasjolin.
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