Resource stocks drive gains in London after U.S., China trade tensions ease

  • Written by MarketWatch
  • Published in Economics

The London stock market surged on Monday, following positive talks between the U.S. and China to ease trade tensions, with gains led by resource and oil stocks.

What are markets doing?

The U.K.’s FTSE 100 UKX, +1.18%[1] closed 1.6% higher to 7,062.41, after closing out the month of November with a 2% decline, and a 0.4% loss on last week

The British pound GBPUSD, -0.1255%[2]  fell to $1.2716 from $1.2752 late on Friday.

What is driving the market?

President Donald Trump and Chinese President Xi Jinping agreed a trade truce at the weekend, with the U.S. promising not to implement planned tariff increases on Chinese goods, on a batch of scheduled exports worth $200 billion to the U.S.

Oil prices CLF9, +3.49%[3]  rallied 4%[4], driven by Russian President Vladimir Putin and Sa G-20. Putin and his Saudi Arabia counterpart agreeing to extend their oil deal to manage supply[5], which helped to drive optimism for the Dec. 6 OPEC meeting in Vienna. Energy markets gained upward momentum as Canadian producers also announced a cut to output.

Which stocks were active?

Trade-sensitive resource stocks witnessed the biggest gains with heavyweight Rio Tinto PLC RIO, +2.76%[6]  rose 4% and Antofagasta PLC’s stock ANTO, +7.85%[7]  closed up 7.9%

Oil stocks also performed well, with heavyweights BP PLC BP, +2.10%[8] advancing 2.3% and Royal Dutch Shell PLC’s shares RDS.A, +2.33%[9] up over 1.9%.

Banks also rose, with HSBC Holdings PLC HSBC, +2.33%[10] gaining 2.4% and...

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