London's FTSE 100 surges as hopes rise over US-UK trade deal
The UK's top index has had a run of gains after suffering sharp losses in the days following Donald Trump's tariffs announcement, where it plummeted to its lowest level in a year.
It gained 114.78 points on Tuesday, or 1.41%, to close at 8,249.12.
It comes as US vice president JD Vance said the administration was 'working very hard' to negotiate a 'great' trade deal with the UK.
Mr Vance said the 'reciprocal relationship' between the US and UK gave Britain a more advantageous position than other European countries when it comes to negotiating new trade arrangements.
Meanwhile, on Saturday, Mr Trump said electronics such as smartphones and laptops would be exempt from tariffs – including the 145% charge on imports from China.
Danni Hewson, head of financial analysis at AJ Bell, said investors were feeling 'cautiously optimistic' with another 'strong day for London markets'.
She said: 'From smart phones to shiny new cars, the prospect that the US President is considering a reprieve, however temporary, on import taxes has done much to allay fears that Trump 2.0 had turned his back on markets.
'Because a lot can happen in 90 days – deals can be made, and the prospect that the UK could be near the front of the pack when it comes to trade negotiations is heartening and suggests the Government's softly-softly approach may have been a sensible one.'
European stocks were also rebounding as a more optimistic mood washed over global markets.
In Frankfurt, the Dax (^GDAXI) rose 1.43%, and in Paris, the Cac 40 (^FCHI) closed 0.86% higher.
Over in the US, it was a more tentative start to trading. The S&P 500 (^GSPC) was up about 0.3%, and Dow Jones up 0.2% by the time European markets closed.
The pound was continuing to strengthen against key currencies. Against the US dollar, sterling was up about 0.3%, at 1.323, to hit a fresh six-month high.
And against the euro, the pound was up 0.8%, at 1.171.
The price of Brent crude oil (BZ=F) was down around 0.7% to 64.4 US dollars per barrel.
In company news, shares in De La Rue (DLAR.L) surged after the banknote printer said it had agreed to be bought by US buyout firm Atlas for £263 million.
Atlas offered 130p per share in its bid – lower than the 132.17p per share offer tabled in a rival bid from British financier Edi Truell's vehicle.
De La Rue said a sale to Atlas would 'ensure long-term stability for our customers and our people'. Shares in the company were 14.7% higher at close.
Elsewhere, Halfords (HFD.L) shares were given a boost after the retailer said it had appointed Henry Birch, the former boss of Very Group, to be its new chief executive.
Mr Birch takes the post immediately to replace Graham Stapleton, Halfords' boss of seven years.
The company also reported rising sales from the previous year, and said its profit will be at the higher end of previous guidance of £32 million to £37 million. Shares in Halfords were 11% higher at close.
The biggest risers on the FTSE 100 (^FTSE) were 3i Group (III.L), up 226p to 4,130p, St James's Place (STJ.L), up 36.4p to 900.4p, Intermediate Capital (ICG.L), up 66p to 1,816p, Segro (SGRO.L), up 24.2p to 669.8p, and Fresnillo (FRES.L), up 38p to 1,058p.
The biggest fallers on the FTSE 100 were Diageo (DGE.L), down 73p to 2,036p, Glencore (GLEN.L), down 4.1p to 255.95p, Pershing Square (PSH.L), down 38p to 3,352p, Rentokil (RTO.L), down 1.8p to 334.2p, and AstraZeneca (AZN.L), down 40p to 10,280p.
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