FTSE 100 index rises on hopes of US – China trade war breakthrough
The FTSE 100 is up more than one per cent this morning on hopes of a breakthrough in trade talks between the US and China.
The index was boosted by hopes of progress in the trade war, which were sparked by news reports suggesting that the US is considering reducing tariffs on Chinese imports.
Read more: Markets lift as US-China trade talks reach conclusion
Housebuilders Barrett Development and Persimmon were both trading more than three per cent up, followed by insurance company Prudential and Standard Chartered bank which were both up by 2.7 per cent.
Meanwhile, ITV shares began to recover after falling almost seven per cent yesterday after Bank of America Merrill Lynch cut the broadcaster's target price over fears of declining advertising.
City Index senior market analyst Fiona Cincotta said: "Positive signals from both US and China about their trade tariff discussions are supporting Asian and European stocks.
"The FTSE is trading comfortably higher helped by the fact that the pound is losing ground. Rio Tinto’s production report helped pull other miners higher but housebuilders and financial services companies also traded higher."
“Investors have been getting very tired of the trade war tensions so any progress on this front could be extremely supportive for the markets,” Russ Mould, investment director at AJ Bell added.
Two of the biggest losers in the FTSE 100 currently are Easyjet, down more than two per cent, and British Airways holding company International Airlines Group following the news that rival Ryanair issued a profit warning this morning, sparking concerns it may drive flight fare prices down further.
|International Airlines Group||609.6p||-1.01|
"Airlines are under pressure in the wake of a second Ryanair profit warning in just four months. Incredibly, the firm which already provides some of the cheapest fares in Europe may have to cut fares further to compete in such a low-fare environment, piling pressure on firms such as Easyjet," IG senior market analyst Joshua Mahony said.
Read more: FTSE round up: Unilever boosts index as Easyjet sinks
"With the firm hoping to gain over the medium term after grabbing market share from their competitors, it is clear that the price war is going to intensify as we move forward, with the likes of British Airways looking particularly at risk given their inability to satisfy both low cost or high-end consumers."