LONDON, Nov 28 — London's FTSE 100 hit a near four-month high yesterday as recent risk-on sentiment was bolstered after US President Donald Trump said Washington and Beijing were close to a “phase one” trade deal, while an impressive forecast lifted BAT shares.
The main index added 0.4 per cent on its fourth straight day in positive territory, as Asia-focussed HSBC and miners gained on the prospect of an initial US-China trade accord.
British American Tobacco was the biggest boost among blue-chips, rising 3.1 per cent after it forecast annual revenue to grow in the upper half of its long-term target range.
The FTSE 250 index of midcap companies also rose 0.4 per cent, closing at its highest since July, 2018, as hopes of an end to the Brexit saga through an election attracted traders to the domestic stocks.
The index has advanced roughly 4 per cent since October 29, when parliament approved Prime Minister Boris Johnson's call for a general election.
Markets see a prospective victory for Johnson's Conservative Party as the most likely scenario for Brexit to be delivered by the January 31 deadline. As such, the pound weakened slightly after polls showed the Conservative lead was narrowing.
However, an 8 per cent fall in publisher Future Plc weighed on the midcaps following a discounted share placement. Its shares marked their worst one-day performance since mid-June.
The broader mood was firmly upbeat after Trump's comments on trade following a telephone conversation between senior US and Chinese negotiators, though CMC Markets analyst Michael Hewson hollered caution as the December 15 deadline for new tariffs draws closer.
“It still remains unclear what the timing is likely to be on the agreement of a phase one deal,” Hewson said. “However with three weeks until December 15, it's not hard to imagine that it is highly unlikely that we'll get anything tangible before that.”
Washington's support of pro-democracy protesters in Hong Kong may also be a sticking point in negotiations.
Among smaller stocks, holiday package provider On The Beach , which has said it will gain market share in the wake of Thomas Cook's collapse, climbed 3 per cent higher after reporting a rise in adjusted profits.
A standout loser across the board was FastJet, which plunged 32 per cent to a new record low after it said it wanted to sell its Zimbabwean operations and raise capital, which could help the low-cost carrier make it until 2021. — Reuters