FTSE 100 surges as traders hopeful over US-EU trade negotiations
The UK's FTSE 100 has closed in on its highest level since March as the index continues to be buoyed by hopes of improving global trade relations.
The blue chip index rose 60.08 points, or 0.69%, to close at 8,778.05, bringing it just shy of a nearly three-month peak that it reached during the day.
Germany's Dax also soared by 1% as traders reacted to Donald Trump saying he was delaying a 50% tariff on EU imports to the US.
On Monday, the US President told reporters that pushing back the date of introducing the new rate, from June 1 to July 9, was to allow time for 'serious negotiations' with the bloc.
European Commission President Ursula von der Leyen wrote in a post on X that Europe was 'ready to advance talks swiftly and decisively'.
Aerospace giants Melrose Industries and BAE Systems were among the biggest risers of the day, helping lift the FTSE 100 to its highest level since March, before Mr Trump's 'liberation day' announcements.
The positive sentiment had spread to the US in early trading. On Wall Street, the S&P 500 was up about 1.7%, and Dow Jones was 1.5% higher by the time European markets closed.
Chris Beauchamp, chief market analyst for IG, said: 'UK and US investors returned from their respective long weekends with a spring in their step thanks to the abrupt decision to pause higher tariffs on the EU.
'The half-life of each tariff increase continues to get shorter and shorter, and traders continue to fade the move.
'While the Dax pushes on to a new record high, the FTSE 100 finds itself around 100 points away from its own peak.'
The Dax closed 0.83% higher, while France's Cac dipped 0.02% at close.
The pound was weakening against the US dollar, falling 0.4%, at 1.3505. Sterling was edging up about 0.05% against the euro, at 1.192.
The price of Brent crude oil was tumbling about 1.7% to 63.65 US dollars per barrel.
In company news, shares in React Group plunged by a fifth after the cleaning services specialist said its annual results were likely to come in below expectations.
The company said 'global economic pressures extending business decision cycles' meant it was taking a 'cautious' approach around new business wins over the second half of the year. Its share price closed 19.4% lower.
Elsewhere, Inspired shares were given a boost after HGGC said it was in talks about making a possible offer to buy the energy and sustainability advisor.
HGGC said its takeover bid was worth 81p per Inspired share, valuing the business at about £130 million. Inspired's share price closed 8.5% higher.
The biggest risers on the FTSE 100 were Melrose Industries, up 25.1p to 476.5p, Intermediate Capital, up 62p to 2,020p, Ashtead, up 131p to 4,348p, Antofagasta, up 43.19p to 1,797p, and Intercontinental Hotels Group, up 206.83p to 8,738p.
The biggest fallers on the FTSE 100 were Diageo, down 70.9p to 2,031p, Tesco, down 11.4p to 386.8p, BAE Systems, down 48.16p to 1,900p, Beazley, down 22.03p to 922.5p, and National Grid, down 23.41p to 1,085.5p.
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