UPDATE 2-FTSE 100 up as miners, banks rally; easyJet warning tugs airlines

  • Reuters
  • Stock Market News
UPDATE 2-FTSE 100 up as miners, banks rally; easyJet warning tugs airlines

* FTSE 100 up 0.5 pct, FTSE 250 up 0.6 pct

* EasyJet slumps on weak trading update

* IAG, Ryanair, Wizz Air all fall in response

* Miners, banks top boosts to main index (Adds company news items, updates to closing prices)

By Muvija M

April 1 (Reuters) - Gains in miners and banks propelled London's main bourse higher on Monday, as sentiment picked up after surprisingly upbeat data from China and progress in U.S.-China trade talks, while easyJet's bleak forecast triggered a sell-off in airline stocks.

The FTSE 100 .FTSE ended 0.5 percent higher after rallying as much as 1 percent with gains capped due to investors shunning defensive stocks, and the midcaps .FTMC added 0.6 percent.

UK markets joined a global rally sparked by data showing Chinese factory activity grew for the first time in four months in March, as well as hopes of a resolution to a prolonged trade dispute between Washington and Beijing. driving sentiment was a survey that showed UK manufacturing growth at an unexpected 13-month high last month as the country stockpiles for Brexit. .FTNMX1770 jumped 2.5 percent to a 10-month high as base metals prices rose, including nickel after data suggested stimulus measures in China, the world's biggest nickel consumer, were boosting the economy. progress and reassurance about the Chinese economy also helped Asia-exposed stocks such as HSBC HSBA.L and StanChart STAN.L .

"The trade deal is going very well," U.S. President Donald Trump said on Friday, with talks between the world's two largest economies set to resume this week. Brexit conundrum continued, with parliament set to vote on different options, and sterling firmed on hopes that the uncertainty will end in a softer Brexit than Prime Minister Theresa May's defeated withdrawal agreement. default remains for the UK to fall out of the European Union without a deal on April 12.

CAUTIOUS TONE

All but two sectors in the FTSE 100 were in positive territory, with easyJet's EZJ.L weak trading update the biggest negative.

WPP WPP.L , the world's biggest advertising group, added 3 percent on its best day in a month after a Deutsche Bank (DE: DBKGn ) rating upgrade.

EasyJet EZJ.L , by contrast, suffered a 10 percent slump on its worst day in nearly three years after it flagged soft ticket pricing, partly due to Brexit uncertainties. cautious tone brought down shares in British Airways-owner IAG ICAG.L , Wizz Air WIZZ.L and the London-listed shares of Ryanair RYA.L by between 2 and 4.3 percent.

Defensive stocks, which are deemed safer at times of uncertainty, underperformed. British American Tobacco (JO: SNHJ ) BATS.L and Imperial Brands IMB.L were among the worst fallers, while United Utilities UU.L , SSE SSE.L and National Grid NG.L also weakened.

Among midcaps, iron ore pellet producer Ferrexpo FXPO.L jumped 6.3 percent as higher iron ore prices took precedence over the company delaying annual results again, with charity investigation continuing. BAB.L edged 3 percent higher after a media report that Rolls-Royce RR.L director and former Shell RDSa.L executive Ruth Cairnie would take over as chairman of the defence contractor.

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