FTSE 100 surges as trade war fears buoy investors

The FTSE 100 surged on Monday as traders kicked off December by celebrating a ceasefire in the US-China trade war.

London’s top flight added 82.17 points, or 1.18%, to close at 7,062.41 as miners led the charge.

Michael Hewson, analyst at CMC Markets UK, said: “European markets have had a decent start to the month, after an escalation to the US China trade dispute was deferred well into next year.

“Some have suggested that it is premature to get too carried away and in some respects that is correct, but for the here and now, and in the absence of anything else it is still a positive outcome, and could drive some strong gains in the weeks ahead.”

Antofagasta and Evraz were two of the day’s biggest winners, rising 62.8p to 863.2p and 34.7p to 488.8p respectively.

At the bottom of the index was GlaxoSmithKline, which was involved in two deals on Monday.

First, the drugs maker sold Horlicks and a clutch of other health drink brands in India to Unilever for 3.3 billion euros (£2.94 billion).

Later in the day, GSK announced it is to acquire oncology-focused US pharma business Tesaro for 5.1 billion US dollars (£4 billion).

Shares closed down 123.6p at 1.498p.

On the FTSE 250, shares in travel firm Thomas Cook continued their slide as investors fret over its long-term prospects.

The company’s stock shed another 6.46p, or 24.46%, to close at 23.64p.

Traders appeared to be reacting to a note issued by Berenberg, which said Thomas Cook must raise £400 million to deal with its debt, cut its target price to 12p from 65p and cut its rating to sell from hold.

Last week, the group unveiled a loss after tax of £163 million, compared with a profit of £9 million this time last year.

McColl’s shares tanked after the convenience store operator warned over profits as it was stung by the collapse Palmer & Harvey.

The group said in a trading update that the failure of the supplier resulted in “significant supply chain disruption”, and that it is “continuing to experience a number of challenges”.

As a result, McColl’s now expects adjusted earnings for the full year to come in at around £35 million, down from a previous forecast of £44 million.

Investors sent shares tumbling nearly 30%, or 35.35p, to 83.4p.

The pound, meanwhile, came under selling pressure as Brexit once again took its toll.

Sterling shed 0.3% versus the US dollar to sit at 1.274 at the London market close.

Against the euro, the pound was also down 0.3% at 1.122.

Mr Hewson added: “The pound has come under pressure, despite economic data that continues to show a UK economy that is outperforming the rest of Europe. Political concerns are once again acting as an anchor on sentiment as scepticism over whether Theresa May’s Brexit deal will get passed through Parliament next week.”

In Europe, Germany’s DAX closed up 1.85% and France’s CAC was 1% higher.

A barrel of Brent crude was trading at 60 US dollars, a rise of 2.6%.

The biggest risers on the FTSE 100 were Antofagasta up 62.8p at 863.2p, Evraz up 34.7p at 488.8p, Anglo American up 109.2p at 1,675.4p and Wood Group up 39.4p at 674.4p.

The biggest fallers on the FTSE 100 were GlaxoSmithKline down 123.6p at 1,498p, Kingfisher down 7p at 243p, BT Group down 5.4p at 256.6p and Royal Mail down 4.4p at 315.4p.