The FTSE 100 was on the verge of a record high on Wednesday as the index made another measured move to the upside amid hopes the US and China would strike a trade agreement.
London’s leading index was 0.1% higher at 8,858 at the time of writing after trading above 8,880 earlier in the session. Early gains we sold into as investors braced for the UK government’s spending review.
“The FTSE 100 looks like it might attain the closing high it missed by a whisker yesterday as positive news on trade talks between the US and China boosted sentiment,” says AJ Bell investment director Russ Mould.
“Banks, housebuilders and miners did the heavy lifting for the index with the retail sector proving a drag on Wednesday morning after weak sales data yesterday.
“US and China have agreed a framework trade deal as they ironed out some difference over export controls on rare earths and technology.”
Optimism around a trade deal helped London’s China-focused stocks once more. Prudential was the top riser with a gain of 2.4%, while miners Glencore and Rio Tinto gained on the session.
Housebuilders were also in focus as investors continued to add the sector to their portfolios following poor economic data that increased bets on interest rate cuts and an upbeat assessment of trade by peer Bellway yesterday.
The sector received another boost from Ibstock’s update that highlighted growing demand for bricks during the first half of the year. FTSE 250 Ibstock’s shares sank as rising costs offset the good news about improving demand.
BT shares were 2% on reports by the Telegraph that the group was considering making a bid for TalkTalk, one of OpenReach’s biggest customers.