LONDON (Reuters) - Signs of an easing in the trade dispute between the United States and the European Union helped push Britain’s top share index up on Thursday with gains in basic materials and energy stocks, while shares in AB Foods fell after a trading update.
The blue chip FTSE 100 .FTSE index closed up 0.4 percent at 7,603.22 points, slightly underperforming other European bourses.
Shares in automakers in Germany, France and Italy surged after a German newspaper reported President Donald Trump could suspend threats to impose tariffs on cars imported from the European Union if the bloc lifted duties on U.S. cars.
The optimism on European trading floors and later on at the open on Wall Street contrasted with Asia where Chinese stocks fell a day before China and the United States were set to hit each other with punitive tariffs.
“Stocks have proceeded in fits and starts this week, mostly thanks to the U.S. holiday, but the absence of a real bounce in Asian markets does lend strength to the bearish case”, said IG analyst Chris Beauchamp, referring to the U.S. July 4 holiday.
Shares in Associated British Foods (ABF.L) posted the worst individual performance, down 4.2 percent, after it warned lower European Union prices would hit profit in its sugar business.
The owner of Primark stuck to its overall forecast for “progress” in adjusted operating profit and adjusted earnings per share (EPS) for the year to September 2018, saying the sugar weakness would be offset by higher margins at the fashion chain.
“Full-year guidance remains unchanged but traders are clearly taking this with a pinch of sugar,” said Mike van Dulken, head of research at Accendo Markets.
Among smaller stocks, Superdry (SDRY.L) jumped 7.1 percent after posting double-digit growth in full-year revenue and declared a special dividend.
Sophos (SOPH.L) slumped over 20 percent, its biggest ever one-day drop, after reporting lower than expected billings growth.
Reporting by Julien Ponthus; Editing by Edmund Blair