London close: Stocks extend gains on the back of US-China trade deal optimism

London stocks extended their recent gains on Monday, with miners leading the charge amid growing optimism over a Sino-US trade deal.

The FTSE 100 was up 0.92% at 7,369.69, with sentiment underpinned by renewed hopes over a trade deal between the US and China after US Commerce Secretary Wilbur Ross said on Sunday that licenses for US companies to do business with Huawei Technologies will be coming "very shortly".

In an interview with Bloomberg TV in Bangkok, Ross made some positive noises about the possibility of a deal being struck this month.

"We’re in good shape, we’re making good progress, and there’s no natural reason why it couldn’t be," he said. "But whether it will slip a little bit, who knows. It’s always possible.”

Chris Beauchamp, chief market analyst at IG, said: "As we hit new record highs in the US, with a decent performance in Europe too, it seems that 2018 and 2019 have been the necessary antithesis to the bullishness of 2016 and 2017. The path of the end of the year may not be entirely smooth, but it does look as if fortune will continue to smile on stock markets."

Meanwhile, sterling was down 0.22% against the US dollar at 1.29076 and 0.1% lower versus the euro at 1.1581go after data showed that the UK construction sector continued to struggle in October, with civil engineering declining at the fastest rate for a decade and firms across the board reducing workforces.

The IHS Markit CIPS UK construction total activity index rose to 44.2 from 43.3 in September, coming in marginally ahead of consensus expectations of 44.1. However, it remained well below the 50.0 mark that separates contraction from expansion.

Overall volumes of work fell for the sixth consecutive month and there was a sharp drop in new work. Construction companies also continued to trim workforces. Employment numbers have now declined every month since April.

Civil engineering was the worst-performing area, with business activity falling at the sharpest pace since October 2009. House building was also down, however, with the drop in residential work the greatest recorded for over three years. Commercial construction fell for the tenth month running, although the fall was at the slowest rate since May.

Tim Moore, economics associate at IHS Markit, said political uncertainty and subdued economic conditions were holding back sales.

"There are clear signs that construction firms are positioning for an extended soft patch for project starts, as highlighted by further decline in purchasing volumes and another month of cuts to workforce numbers through the non-replacement of voluntary leavers," he said.

In equity markets, miners were the standout gainers on trade hopes, with Glencore, Rio Tinto, BHP and Antofagasta all firmly in the green.

British Airways and Iberia parent International Consolidated Airlines flew higher after saying it had agreed to buy Spanish airline Air Europa for €1bn.

Premier Inn owner Whitbread was boosted by an initiation at 'buy' by Peel Hunt, while Pets at Home was lifted by an upgrade to 'buy' at Liberum.

On the downside, Hiscox was the worst performer on the top-flight index after it reported a rise in third-quarter premiums and said it had set aside $165m for claims related to hurricane Dorian and typhoons Hagibis and Faxai.

Flutter Entertainment, GVC Holdings, William Hill, 888 Holdings and Rank Group were all under the cosh amid news that a report released by a group of MPs suggested that online casinos should be subject to maximum stake limits similar to the £2 limits imposed on fixed-odds betting terminals.

Market Movers

FTSE 100 (UKX) 7,369.69 0.92%
FTSE 250 (MCX) 20,249.72 0.45%
techMARK (TASX) 3,966.76 0.46%

FTSE 100 - Risers

NMC Health (NMC) 2,351.00p 5.66%
Glencore (GLEN) 252.20p 4.67%
Smurfit Kappa Group (SKG) 2,758.00p 4.63%
Rio Tinto (RIO) 4,294.00p 3.02%
Kingfisher (KGF) 215.30p 2.97%
BHP Group (BHP) 1,722.80p 2.95%
BP (BP.) 510.60p 2.72%
Meggitt (MGGT) 638.20p 2.70%
Smith (DS) (SMDS) 372.10p 2.54%
St James's Place (STJ) 1,064.50p 2.50%

FTSE 100 - Fallers

Flutter Entertainment (FLTR) 7,932.00p -3.39%
Hiscox Limited (DI) (HSX) 1,440.00p -2.37%
Land Securities Group (LAND) 915.60p -1.78%
JD Sports Fashion (JD.) 758.20p -1.53%
British Land Company (BLND) 602.80p -1.44%
Rentokil Initial (RTO) 446.80p -1.41%
Compass Group (CPG) 2,012.00p -1.23%
Barratt Developments (BDEV) 626.80p -1.14%
Next (NXT) 6,568.00p -0.94%
Persimmon (PSN) 2,270.00p -0.83%

FTSE 250 - Risers

Wood Group (John) (WG.) 366.10p 8.47%
Softcat (SCT) 1,004.00p 4.37%
Hunting (HTG) 419.40p 4.28%
IntegraFin Holding (IHP) 390.00p 4.00%
Bakkavor Group (BAKK) 119.60p 3.64%
Kaz Minerals (KAZ) 499.90p 3.61%
Petrofac Ltd. (PFC) 400.60p 3.59%
Tullow Oil (TLW) 217.00p 3.53%
Rotork (ROR) 319.90p 3.53%
Investec (INVP) 458.90p 3.45%

FTSE 250 - Fallers

888 Holdings (888) 157.00p -12.78%
William Hill (WMH) 176.25p -12.66%
GVC Holdings (GVC) 803.40p -10.47%
Dunelm Group (DNLM) 768.00p -3.27%
Homeserve (HSV) 1,176.00p -2.97%
Rank Group (RNK) 238.50p -2.85%
Greggs (GRG) 1,755.00p -2.77%
IP Group (IPO) 58.60p -2.66%
Watches of Switzerland Group (WOSG) 298.00p -2.61%
Network International Holdings (NETW) 530.00p -2.57%