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Sino-U.S. trade hopes lift FTSE 100; TUI slumps

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Sino-U.S. trade hopes lift FTSE 100; TUI slumps
FILE PHOTO: Signage is seen outside the entrance of the London Stock Exchange in London, Britain. Aug 23, 2018. REUTERS/Peter Nicholls/File Photo   -   Copyright  Peter Nicholls(Reuters)
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(Reuters) – Britain’s FTSE 100 thrived as hopes of progress in the latest round of Sino-U.S. trade talks ignited optimism, while tour operator TUI tumbled after a profit warning and AstraZeneca weakened after a $6.9 billion cancer drug tie-up.

The FTSE 100 gained 0.6 percent and the FTSE 250 added 0.5 percent by 0836 GMT.

Optimism surrounding trade talks between China and the United States, to be kicked off on Friday, buoyed miners. Asia-exposed financial heavyweights HSBC and Prudential also rose.

Sentiment was aided by comments from U.S. Treasury Secretary Steven Mnuchin that he and U.S. Trade Representative Robert Lighthizer had concluded “constructive” trade talks in Beijing.

Oil majors also gained as crude prices rose and were set for their biggest quarterly rise since 2009. [O/R]

But London-listed shares of TUI slumped 9.9 percent to the bottom of the main bourse and hit a record low after the German tour operator issued a profit warning due to grounding of Boeing’s 737 MAX aircrafts in the wake of two deadly crashes of the model.

AstraZeneca slipped 3.6 percent after a cancer drug deal with Daiichi Sankyo that would have the British drugmaker pay as much as $6.9 billion to its Japanese partner.

At home, the situation remains uncertain as lawmakers get set to vote on Prime Minister Theresa May’s withdrawal agreement at a special sitting – but not on the framework for future relations with the EU she negotiated at the same time. Britain was originally scheduled to leave the EU on Friday.

Rating changes drove some moves on the mid-cap index.

Independent alternative investment manager Man Group advanced 3.7 percent after Credit Suisse initiated coverage with an “outperform” rating, while specialty chemicals maker Victrex gave up 4 percent after Barclays cut price target.

(Reporting by Shashwat Awasthi and Yadarisa Shabong in Bengaluru; Editing by Alison Williams)

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