Market report: Trade-war progress bolsters FTSE 100

Donald Trump
Donald Trump claimed trade talks with China are in the “final throes” Credit: Joe Raedle/Getty Images North America

The FTSE 100 closed at its highest level in almost four months on Wednesday, as traders continued to pile into stocks amid hopes of a trade-war breakthrough.

The blue-chip index registered a gain for the fourth session in a row, following comments made by Donald Trump on Tuesday night. The US president said Washington and Beijing were in the “final throes” of striking a “phase one” accord to dial back tariff tensions between the world’s two biggest economies.

London’s top exchange is still some way off returning to its late July levels, closing some 2pc below where it stood before fears of a currency war sparked by Mr Trump’s escalation of trade hostility led to a global equities rout.

“On one level, it’s possible to interpret markets, and indeed the president of the United States, as enjoying the moment,” said City Index’s Ken Odeluga. “At some point, fairly soon, such sentiment may turn out to be ludicrous. After ‘phase one’ is done and dusted, and when longer-term, more comprehensive, complex and contentious aspects of the trading relationship must be addressed in more detail.”

Several indices have continued to push into record-high territory, with Wall Street inching further into uncharted territory. Today will be a quiet day across US markets, most of which will be closed for Thanksgiving, with reduced activity expected on Friday as well.

Across London’s markets, there was a smattering of notable moves.

British American Tobaccowas one of the biggest blue-chip risers, after maintaining its earnings-per-share guidance while warning on its growth outlook for the full year.

The company said it “continues to perform well”, but reported growth in its new category products would be at the lower end of guidance, reflecting “the recent slowdown in the US vapour market”. Its shares rose 94p to £30.80. Its performance lifted fellow tobacco giant Imperial Brands, which rose 44p to £17.13. The biggest FTSE 100 faller was Rolls-Royce, with the engineer hit by a Morgan Stanley downgrade and an S&P rating cuts.

S&P warned the group’s profitability was “weak and volatile” following problems with its Trent 1,000 engine. It fell 25.2p to 715.8p

On the FTSE 250, shares in Aston Martin Lagonda jumped 56.5p, or 11pc, to 585.8p as it teased its forthcoming Valkyrie model, while magazine publisher Future dropped 126p, or 8pc, to £14.46 after its bosses sold off around £42m of shares.

Shares in lender Amigo ended the day up 0.4p at 60p after it said a Financial Conduct Authority review has been completed, and did not find problems with its guarantor product or business model. The company has faced questions over the terms of its loans, for which the borrower’s friends or family offer a guarantee.