U.K. stocks leapt by the most in about seven weeks Tuesday, as risk appetite was revived by an ebb in global trade-war worries. A gain in GlaxoSmithKline PLC shares after a massive deal helped put the FTSE 100 on track to break a losing streak.
How markets are moving
The FTSE 100 index UKX, +1.58% rose 1.4% to 6,984.02, the biggest percentage rise since Feb. 2, according to FactSet data. All sectors rose, led by the health care and basic materials sectors. On Monday, the index fell 0.5%, ending at its lowest since December 2016 and marking a fourth consecutive loss.
The pound GBPUSD, -0.5341% changed hands at $1.4194, down from $1.4230 late Monday in New York.
What’s driving markets
London’s blue-chip stocks rallied alongside European stocks SXXP, +1.26% and Asian stocks NIK, +2.65% HSI, +0.79% , with the moves coming after Wall Street’s massive jump on Monday that left the Dow Jones Industrial Average DJIA, +2.84% up 669 points.
U.S. stocks logged their best one-day percentage gains on Monday on reports that U.S. and China are conducting behind-the-scenes talks to avert a global trade war. That helped U.S. stocks recouping some of the sharp losses they posted last week.
Fears about a possible trade war have hit global equity markets this month, driven by U.S. President Donald Trump’s push for tariffs on up to $60 billion of Chinese products.
Opinion: Who gets hurt in a trade war? Mostly not China
What strategists are saying
“Investors were encouraged by comments from Chinese Premier Li Keqiang, who pledged to maintain trade negotiations and ease access to American businesses,” said Marshall Gittler, chief strategist at ALCS Global, in a note.
“China so far has unveiled tariffs on only $3 billion of U.S. goods in response to threats of tariffs on some $50 billion of Chinese goods. That muted response suggests China is trying to avoid an out-and-out trade war and leave room for negotiations. Both sides have made optimistic comments that some agreement can be reached,” he said.
Stock movers
GlaxoSmithKline PLC GSK, +4.18% gained 4.1% after the drug maker agreed to pay $13 billion to Novartis AG NOVN, +2.07% for its 36.5% stake in their consumer health care joint venture.
Ferguson PLC FERG, +4.83% jumped 5.3% as the building materials company said it plans to pay a $1 billion special dividend, and that its revenue and profit increased in the first half of its 2018 financial year.
Mining stocks bounced up on talk of easing trade tensions between the U.S. and China, which is a major buyer of industrial and precious metals.
Glencore PLC GLEN, +2.64% stepped up 2.7%, Anglo American PLC AAL, +2.49% tacked on 2.4% and iron ore miner Rio Tinto PLC RIO, +1.61% picked up 1.7%.