London close: Stocks higher after Beijing extends an olive branch to Washington

London stocks finished firmly in the green on Thursday amid at least a lull in trade tensions between the US and China and end of month window dressing by fund managers.

The FTSE 100 was up 0.98% at 7,184.32 Meanwhile, sterling was more or less steady against both the US dollar and the euro, having tumbled on Wednesday on news that Prime Minister Boris Johnson had decided to suspend Parliament for five weeks.

David Cheetham, chief market analyst at XTB, said: "The simple fact remains that the threat of a no-deal remains large and is likely to stay that way for the foreseeable future."

"Recent developments don’t really materially change the chances of this scenario playing out, but they have certainly focused minds and applied pressure on the opposition to get their act together pretty swiftly if they want to be anything more than interested observers going forward."

"It is perhaps telling that after the knee-jerk move lower as the news dropped there was a lack of follow through to the downside for the pound and it’s becoming ever more apparent that a fair bit of bad news is already priced-in to the currency."

Away from Brexit, sentiment got a boost after a spokesperson for China's commerce ministry said that an escalation in the trade war with the US would not be good for China or the rest of the world and that it would refrain from an immediate retaliation.

Speaking at his regular weekly press briefing, Gao Feng said: "The most important thing is to create the necessary conditions for continuing negotiations."

Some strategists, such as those at Bank of America-Merrill Lynch had over the preceding weeks been anticipating a breakthrough in US-China trade talks in September, but many analysts remained cautious.

Oanda's Craig Erlam said: "The unfortunate reality is that these comments are likely more hot air but with everything that's happening at the moment, they do provide rays of hope."

In equity markets, Smiths Group was the standout gainer on the FTSE 100 thanks to an upgrade to 'buy' from 'neutral' at Goldman Sachs.

AstraZeneca gained with its shares moving to within a whisker of their 52-week highs after saying that its drug to treat moderate-to-severe lupus met the main goal in a late-stage study.

Imperial Leather maker PZ Cussons ticked higher as it agreed to sell its Greek food subsidiary Minerva and its Polish personal care brand Luksja.

Energy services company Hunting rose as it posted a jump in first-half profit thanks to solid performances in its Asia Pacific, US and EMEA segments.

On the downside, Micro Focus shares tumbled after it said weak sales had forced it to revise its revenue forecasts even lower and accelerate a review of the company. The software maker said revenue on a constant currency basis for the year ending to October 31 would be 6% - 8% lower compared with previous guidance of a fall of 4% - 6%.

Shares of Amigo Holdings cratered as its first-quarter results disappointed due to higher impairments and costs and after the lender warned that annual loan book growth would be flat.

Recruiter Hays was in the red after it posted a rise in full-year net fees but a drop in pre-tax profit on the back of restructuring and pension costs, and highlighted tough conditions in the UK and Germany.

Ex-dividends weighed, as is usually the case on a Thursday, with St James’s Place, Hammerson, Auto Trader, Capital & Counties, Centamin, Charter Court Financial, Hochschild Mining, InterContinental Hotels, John Wood Group, LondonMetric Property, National Express, OneSavings Bank, Plus500, Polypipe, Quilter, Rotork, Tullow Oil and Ultra Electronics all in the frame.

Market Movers

FTSE 100 (UKX) 7,184.32 0.98%
FTSE 250 (MCX) 19,292.50 0.47%
techMARK (TASX) 3,804.82 -0.04%

FTSE 100 - Risers

Smiths Group (SMIN) 1,637.00p 5.13%
Ocado Group (OCDO) 1,281.50p 4.36%
Ashtead Group (AHT) 2,223.00p 4.22%
Melrose Industries (MRO) 177.45p 4.08%
Antofagasta (ANTO) 852.20p 3.75%
CRH (CRH) 2,731.00p 3.21%
Carnival (CCL) 3,462.00p 2.85%
Glencore (GLEN) 231.60p 2.84%
Berkeley Group Holdings (The) (BKG) 3,869.00p 2.49%
Burberry Group (BRBY) 2,166.00p 2.41%

FTSE 100 - Fallers

Micro Focus International (MCRO) 1,051.40p -32.40%
NMC Health (NMC) 2,328.00p -1.81%
St James's Place (STJ) 912.60p -1.76%
InterContinental Hotels Group (IHG) 5,052.00p -0.79%
Flutter Entertainment (FLTR) 6,760.00p -0.53%
Kingfisher (KGF) 193.30p -0.44%
British Land Company (BLND) 507.80p -0.39%
Marks & Spencer Group (MKS) 188.25p -0.26%
Morrison (Wm) Supermarkets (MRW) 183.85p -0.19%
Admiral Group (ADM) 2,120.00p -0.19%

FTSE 250 - Risers

William Hill (WMH) 178.30p 6.13%
Renishaw (RSW) 3,548.00p 5.34%
Games Workshop Group (GAW) 4,432.00p 5.22%
Hunting (HTG) 451.00p 4.93%
Homeserve (HSV) 1,139.00p 4.69%
Victrex plc (VCT) 2,038.00p 4.46%
Weir Group (WEIR) 1,435.00p 4.26%
Kaz Minerals (KAZ) 401.00p 4.05%
IP Group (IPO) 57.60p 3.41%
SIG (SHI) 125.40p 3.38%

FTSE 250 - Fallers

Amigo Holdings (AMGO) 70.70p -51.64%
Charter Court Financial Services Group (CCFS) 255.50p -5.37%
Tullow Oil (TLW) 205.80p -5.29%
OneSavings Bank (OSB) 313.60p -4.39%
Centamin (DI) (CEY) 146.30p -3.97%
Plus500 Ltd (DI) (PLUS) 678.80p -3.30%
CLS Holdings (CLI) 236.00p -2.88%
Clarkson (CKN) 2,320.00p -2.52%
Grafton Group Units (GFTU) 682.50p -2.50%
4Imprint Group (FOUR) 2,720.00p -2.16%