CORRECTED-UPDATE 1-FTSE 100 rises as U.S.-China trade deal nears; midcaps outshine

  • Reuters
  • Stock Market News
CORRECTED-UPDATE 1-FTSE 100 rises as U.S.-China trade deal nears; midcaps outshine
Credit: © Reuters.

(Corrects paragraph 6 to remove reference to value of KKR's bid)

* FTSE 100 up 0.4%, FTSE 250 up 1%

* U.S.-China trade deal back in focus

* Midcaps boosted by BoE rate-cut hopes

* Pennon , Spirent also support FTSE 250

* Housebuilders gain after upbeat view from Savills

By Shashwat Awasthi

Jan 13 (Reuters) - London's main index gained on Monday, in step with global peers, as investors took heart from the imminent signing of a Phase 1 U.S.-China trade deal, while hopes of further interest rate cuts by the Bank of England helped the midcaps outperform.

The FTSE 100 .FTSE added 0.4%, touching its highest level so far this year, as trade hopes were complemented by easing Middle East tensions.

The FTSE 250 .FTMC outshone the blue-chips and the European benchmark .STOXX with a 1% rise and was headed for its best day since Jan. 2.

A Bank of England policymaker said over the weekend that he would vote for policy easing later this month unless economic data improved significantly. senses the bank doesn't want to get behind the curve and is seeking to get a jump on markets whilst still teeing up the (interest rate) cut," analyst Neil Wilson said.

The midcaps were also boosted by a 9% surge in Pennon PNN.L after a report that private equity firm KKR KKR.N had bid for the UK utility's waste management unit in early 2019.

Its shares hit an all-time high and helped those of blue-chip peers United Utilities UU.L , Severn Trent SVT.L and Centrica CNA.L gain more than 2% each.

Housebuilders .FTNMX3720 rose, led by a 3% rise in Taylor Wimpey TW.L , after upbeat forecast and bullish comments from real estate services provider Savills SVS.L . Savills' shares added 5%. now shifts to Washington, where the United States and China will ratify their preliminary trade deal on Wednesday, while the corporate earnings season also kicks off this week.

"The deal is the focal point... With the Phase 1 deal baked in, what markets want to know is how quickly - if at all - the two sides can move things forward to Phase 2," Wilson said.

A brighter trade view, along with a rating upgrade from BofA Global Research, helped BAE Systems BAES.L climb 3% to the top of the main index.

Lending support to the more domestically-exposed bourse was Spirent Communications SPT.L , which jumped almost 13% - and was on course for its best day in almost a year - on better-than-expected annual profit guidance. retailer Ted Baker TED.L lost 4.3% after RBC downgraded the stock. Fellow retailer Superdry SDRY.L , which issued a profit warning last week, shed 7.5% despite RBC raising its rating.

Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb

Error: File type not supported

Drop an image here or