Good news in China boosts FTSE finish

Good news from China helped the FTSE 100 close the day up as a tariff cut pledge and signs the coronavirus outbreak is being contained to the mainland lifted investors’ spirits.

Chinese officials revealed they will cut tariffs by 50% on $75 billion dollars’ worth (£58 billion) of goods from February 14, a month after the US and China signed a pledge for a truce on their trade war.

The US said levies hit more than 1,700 items in September, with seafood, poultry and soybeans suffering hardest.

The day’s events saw the FTSE 100 close up 22.31 points, or 0.3%, at 7,504.79, with the Cac 40 in Paris up 0.9%, while the Dax 30 in Frankfurt closed 0.7% higher.

The tariff announcement also helped the US S&P 500 and Dow Jones indexes hit new highs at the opening bell yesterday.

David Madden, CMC Markets analyst, said: “Traders jumped on this story as it shows the trading relationship between the two sides is taking a positive step.”

The calming over the coronavirus outbreak also helped investors, with market watchers seeming confident that the spread was being contained.

Alan Mcintosh, chief investment strategist at Quilter Cheviot, said: “The US markets hitting all-time high levels is a lot to do with markets looking beyond the human tragedy represented by the coronavirus.”

The boosts in the US had a negative impact on sterling, with a pound worth 1.293 dollars – a fall of 0.5%. Against the euro it was down 0.33% to 1.178.