London markets close higher as US-China worries ease

London’s markets finished with strong gains on Wednesday as tensions briefly eased between the US and China, allowing traders to focus on positive equity updates.

Concerns over China’s reaction to Nancy Pelosi’s trip to Taiwan eased back as the speaker of the US House of Representatives left for South Korea early on Wednesday.

The FTSE 100 ended the day up 36.57 points, or 0.49%, at 7,445.68.

Chris Beauchamp, chief market analyst at IG, said: “The choppier start to August has been reversed to an extent today, with the FTSE 100 and other indices making some headway as some of the fears around a Taiwan crisis begin to ease.

“We have also seen a notable drop in recession concerns, and the strength in oil prices points towards fresh evidence of optimism among investors.

“This has helped to keep the FTSE in positive territory, along with healthy numbers from Taylor Wimpey, which have helped to dispel some of the nervousness around the UK economy.”

Taylor Wimpey was among the top risers on the index after it hiked its full-year earnings outlook to the top end of expectations.

The High Wycombe business closed 6.6p higher at 126.65p

It also handed a welcome boost for other housebuilders, such as Persimmon and Barratt, after worrying signals about the current property market from Nationwide on Tuesday.

Across the continent, the other major European markets also took their pointers from Wall Street to close firmly higher after a strong afternoon.

The German Dax increased 0.99% by the end of the session while the French Cac lifted by 1%.

Meanwhile, sterling edged slightly higher as traders prepared for a potential 0.5% interest rate hike from the Bank of England, when its monetary policy committee convenes on Thursday.

The pound was up 0.15% against the dollar at 1.212 and was 0.06%  higher against the euro at 1.196 at the close.

In company news, Avast rocketed in value after its merger with US rival NortonLifeLock was provisionally given the green light by the UK competition watchdog.

The Competition and Markets Authority (CMA) said it does not believe the tie-up raises competition concerns in the UK following an in-depth merger launched in March.

The UJ-listed firm leapt by 209.1p to 687p at the close of play.

Hiscox finished in the red after it a hefty 107 million dollar (£88 million) loss for the first half of the year amid an increased impact from Russia’s invasion of Ukraine.

The business insurance specialist said the loss was also partly driven by a sharp decline in the value of its investment portfolio over the period.

Shares finished 5.8p lower at 870p on Wednesday.

The price of crude oil pulled off two-week lows after OPEC confirmed output would increase in September but eased back late in the session.

Brent crude oil dipped by 2.12% to 98.37 US dollars per barrel when the London markets closed.

The biggest risers on the FTSE 100 were Avast, up 209.1p to 687p, Taylor Wimpey, up 6.6p to 126.65p, Ocado Group, up 42.6p to 912.2p, Aveva, up 81p to 2,340p, and Rolls-Royce, up 2.99p to 90.79p.

The biggest fallers on the FTSE 100 were Fresnillo, down 35.8p to 676.6p, Centrica, down 3.64p to 85.5p, Croda, down 246p to 7,174p, Airtel Africa, down 5p to 154.2p, and Vodafone, down 2p to 118.86p.