December 3, 2018 / 10:15 AM / 10 days ago

GSK slows down UK stocks after China-U.S. trade truce

LONDON (Reuters) - Mining and energy stocks led a rally in British equity markets on Monday after Washington and Beijing agreed a ceasefire in their trade conflict, which has upended financial markets, and oil prices surged ahead of an OPEC meeting.

FILE PHOTO: A man walks through the lobby of the London Stock Exchange August 5, 2011. REUTERS/Suzanne Plunkett/File Photo

Starting the final month of the year on a positive note, the blue-chip index ended the day up 1.4 percent, gradually easing back after a buoyant open across European markets.

At a G20 meeting in Argentina, China and the United States agreed on Saturday to halt additional tariffs and to meet again in 90 days to try to bridge their differences.

Mining stocks were among the top gainers, as the news led copper prices to rally to two-month highs, spurring hopes for demand for industrial metals from China, the world’s largest consumer.

The sector has been hurt by concerns about global economic growth amid the trade row.

Antofagasta (ANTO.L), Anglo American (AAL.L) and BHP (BHPB.L) were up between 5.9 percent and 7.8 percent.

But shares in GlaxoSmithKline (GSK.L) acted as a drag, losing 7.6 percent after the drugmaker announced it had agreed to buy U.S. cancer specialist Tesaro (TSRO.O) for a hefty $5.1 billion.

The midcaps of the FTSE 250 .FTMC were only up 0.45 percent, with high profile losses.

Ted Baker (TED.L) fell over 15 percent to its lowest in more than five years after the clothes designer said it had launched an investigation into claims against Chief Executive Ray Kelvin.

The stock defied a rally across European luxury goods companies on hopes the U.S.-China detente might boost demand for high-end clothes and accessories among China’s burgeoning middle class. On the FTSE 100, Burberry Group rose 4.6 percent.

Travel company Thomas Cook (TCG.L) notched a fifth straight day of losses, with a 21 percent fall after its profit warning last Tuesday.

Among other individual moves, Dunelm Group (DNLM.L) jumped 14.1 percent after Peel Hunt upgraded the stock.

Among smaller listed companies, McColl’s (MCLSM.L) shares fell to all-time lows, sinking 30 percent after it issued a profit warning.

Reporting by Josephine Mason; Editing by Larry King and Mark Potter

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