FTSE risers and fallers: US-China breakthrough gives markets a pre-weekend boost

The FTSE soared upwards today as China signalled it would be willing to break the impasse in relations with the US.

The markets reacted well to reports that the country was offering to go on a six-year buying spree to ramp up US imports to over $1tn a year.

Officials made the offer, which would wipe out the US’s $323bn trade deficit with China during Beijing negotiations earlier this month, Bloomberg reported.

“Equity markets have been bouncing back since late December and this is the first time we’ve seen the prospect of progress between the US and China,” David Madden, an analyst at CMC Markets, told City A.M.

“We heard that the talks had ended well, but didn’t get many details. Now it looks as if the things are heading in the right direction.”

The FTSE 100 closed up 2.03 per cent at 6,973 boosted by GVC Holdings and Persimmon, while given an extra jab in the arm by oil and mining stocks. Only two stocks closed down on the FTSE 100.

“The FTSE has a lot of exposure to commodities compared to DAX, and the rally in the underlying oil market will be helping the likes of BP and Shell, which adds to the London exchange,” Madden said.

International oil standard Brent crude rose 2.37 per cent to $62.63 per barrel in the afternoon. US standard WTI was up 2.75 per cent to $53.80.

The FTSE 250 rose 1.21 per cent to 18,760.

Hargreaves Lansdown equity analyst Nicholas Hyett said: “Shifting interest rate expectations, and the resulting weakness in pound, is also likely to be playing a part. Weaker economic data, such as today’s retail figures, mean the Bank of England is less likely to raise rates this year, boosting the value of stocks.

“It also devalues the pound, which is good news for overseas earning businesses listed in the UK, and explains why the FTSE 100 has outperformed the FTSE 250 today, since the former tends to earn a higher proportion of profits overseas.”