Europe’s markets bounce back over Ukraine talks and China stimulus

The recovery across European markets kicked on again on Wednesday as reports that talks between Russia and Ukraine made progress helped to prop up trading.

A strong session in Asia, buoyed by plans for extra measures to boost the Chinese economy, helped traders start on a positive footing.

In London, the top index was helped by gains for companies with significant exposure in China, including Standard Chartered and Prudential.

The FTSE 100 ended the day up 115.98 points, or 1.62%, at 7,291.68 points.

“Today has delivered a double-whammy of gifts for embattled markets,” commented Chris Beauchamp, chief market analyst at IG.

“First the Chinese deputy PM hints at economic stimulus, providing a huge bounce for stocks there and giving the rest of the world hope that a sizeable economic package is on the way, evoking good memories of previous stimulus efforts that helped to stabilise the world’s second largest economy.

“As if that wasn’t enough, the Russians and Ukrainians appear to be making some progress towards a deal, including a ceasefire and Ukraine halting any lingering efforts to join NATO.”

This particularly spurred on the volatile markets in continental Europe.

The French Cac was up 3.82% and the German Dax also increased 3.82% by the end of the session.

Meanwhile, sterling gained ground against the dollar due to caution among US currency traders ahead of the latest Fed meeting.

The pound increased by 0.11% against the dollar to 1.311, and rose 0.02% against the euro to 1.191.

In company news, cyber-security giant Avast was the big loser in the FTSE 100 after its merger with US rival NortonLifeLock was put on hold by regulators due to competition concerns.

Competition and Markets Authority (CMA) investigators said the two firms have few competitors, and an in-depth inquiry into the £6 billion deal may need to be carried out.

The announcement hit sentiment and caused an 85.6p fall in its shares to 559.8p.

Elsewhere, tonic maker Fever-Tree Drinks finished significantly higher despite warning that the conflict in Ukraine was adding further pressure to commodity cost increases.

Shares initially fell but swung to major gains as investors and analysts welcomed sales momentum in Europe and the US.

It finished the session 147.5p higher at 1,774.5p.

Meanwhile, Magners cider maker C&C Group saw shares rise by 17.7p to 207.8p after it said it finished its financial year with a “robust return to trading”, although the firm also trimmed annual earnings targets.

The price of oil drifted back below 100 dollars a barrel, with some analysts attributing the weakness to increased prospects of a nuclear deal with Iran being agreed following the release of Nazanin Zaghari-Ratcliffe and Anoosheh Ashoori.

Brent crude dropped by 0.65% to 99.26 US dollars per barrel when the London markets closed.

The biggest risers on the FTSE 100 were Polymetal, up 18.05p to 147.85p, Scottish Mortgage Investment Trust, up 82.4p to 961.2p, Intermediate Capital Group, up 113.5p to 1,707.2p, Mondi, up 100p to 1,527p, and St James’s Place, up 90p to 336.6p.

The biggest fallers on the FTSE 100 were Avast, down 86p to 559.8p, BAE, down 26p to 706p, National Grid, down 36p to 1,119p, United Utilities, down 28p to 1,055.5p, and Severn Trent, down 56p to 2,862p