By Callum Keown
British stocks climbed higher on Friday on hopes for a Brexit deal and after U.S.-China trade talks resumed but the FTSE 100 was held back by a stronger pound.
The FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +1.26% climbed 0.1% but missed out on the higher gains experienced by other European indices after European Commission President Jean-Claude Juncker said a Brexit deal was possible, lifting the pound overnight.
The more domestically-focused FTSE 250 /zigman2/quotes/210598417/delayed UK:MCX +1.24% climbed 0.4% as cautious optimism returned over the U.S.-China trade war.
What’s moving the markets?
Asian markets rose overnight as U.S. and China trade representatives returned to the negotiating table for the first time in almost two months.
Investors remained wary, however, after Chinese state media The Global Times said on Thursday night that China was “not as anxious” to do a deal as the U.S. had thought.
White House adviser Michael Pillsbury also warned that Donald Trump was ready to escalate the trade war.
Despite the developments, European stocks moved cautiously higher building on Thursday’s gains after some central banks across the globe loosened monetary policy.
The internationally-exposed FTSE 100 was held back after European Commission President Jean-Claude Juncker said a Brexit deal was possible.
Juncker’s comments boosted the pound overnight to two-month highs, hitting the FTSE 100’s exporters.
Sterling /zigman2/quotes/210561263/realtime/sampled GBPUSD +0.0816% slipped back over the course of Friday morning, lifting the blue-chip index.
Incoming European Central Bank President Christine Lagarde raised concerns, saying global growth was “fragile” and “under threat.”
Which stocks are active?
Rolls-Royce /zigman2/quotes/203646520/delayed UK:RR +9.94% fell 2.6% after the British aircraft engine-maker warned of further delays in fixing problems with its Trent 1000 engines. The company’s target of fewer than 10 grounded aircraft to be delayed until the second quarter of 2020.
Thomas Cook shares nosedived 17% as the travel operator confirmed that it needed to find a further £200m—on top of £900 million rescue deal with Chinese investor Fosun—to survive.