LONDON (Reuters) - A trade agreement struck between the United States and Mexico boosted investors’ risk appetite on Tuesday, helping British stocks rise further than European shares as the market reopened after a public holiday.
The FTSE 100 .FTSE climbed 0.5 percent, boosted by heavyweight mining stocks and stocks exposed to emerging markets, which also benefited from relief over global trade.
Gains in financials, consumer staples and miners contributed the most to the British blue chip index.
The bullish mood was not even dented by the pound falling to a one-year low against the euro after British Prime Minister Theresa May said that failing to secure a deal with the European Union before Britain leaves the bloc next year “wouldn’t be the end of the world”.
British stocks were also helped by their exposure to emerging markets which got a boost from anxiety over global trade lifting momentarily.
Shares in DP Eurasia (DPEU.L), a Domino’s Pizza Inc (DPZ.N) franchisee operating mainly in Turkey, Georgia and Azerbaijan, and reporting in Turkish lira, jumped 11 percent, having lost as much as half of their value over the previous 30 days.
Outside of trade driven moves, shares in United Arab Emirates-based healthcare provider NMC Health (NMC.L) rose 3.6 percent after the firm denied media reports of acquisition plans in India.
Overall the second-quarter earnings season has not been stellar for UK stocks. Earnings growth was largely down to commodity-related sectors, while the average earnings surprise was negative, Goldman Sachs analysts found.
Earnings for domestic stocks have been revised down, while those of international stocks - which generally benefit from a weaker sterling - have seen upward revisions, they added.
“Progress from here for these stocks will depend on whether global growth stabilises or continues to decelerate,” wrote Goldman Sachs.
Reporting by Julien Ponthus and Helen Reid,; Editing by Andrew Bolton