MARKET REPORT

MORE than £42bn has been added to the value of London’s top-flight stocks as investor jitters over a US-China trade war subsided.

The FTSE 100 soared 165.49 points to 7,199.5, as it joined a wider global rally that sent Germany’s Dax and the Cac 40 in France leaping 2.9% and 2.7% respectively.

Beijing’s pledge to wait 60 days before enforcing a string of tariffs, coupled with White House official Larry Kudlow describing US tariffs as proposals, was enough to convince investors that the spat would not escalate into fullblown stand off.

London-listed equities were also enjoying some support from the weak pound.

Multinational stocks get a boost when sterling falls because their overseas earnings benefit from a more favourable currency translation.

David Madden, analyst at CMC Markets, said: “The US has showed signs that it isn’t as aggressive as traders initially suspected.

“Beijing won’t be implementing its latest list of tariffs for 60 days, so there is still time for the situation to be diffused.

“Market volatility is high, and the choppiness is something that traders are getting used to.

“For the time being, investors are happy to buy into the market, but they are very much aware the sentiment could change quickly.”

On the currency markets, sterling fell back below the 1.40 mark against the US dollar as a lacklustre growth from Britain’s dominant services sector posed concerns for first quarter economic growth.

The pound was down 0.7% to $1.399, with activity in Britain’s services sector sinking to it lowest level since the Brexit vote as bad weather and economic uncertainty took their toll.

The closely watched Markit/CIPS services purchasing managers’ index (PMI) showed a reading of 51.7 in March, down from 54.5 in February and missing economists’ expectations of 54.0. A reading above 50 indicates growth.

Against the euro, the UK currency was down 0.2% to 1.144.

The biggest risers on the FTSE 100 were Micro Focus International up 89p at 1,094p, Evraz up 23.3p at 450.4p, Johnson Matthey up 131p at 3,151p, and easyJet up 66.5p at 1,641.5p.

The biggest fallers were Direct Line Insurance Group down 38.5p at 348.1p, Aviva down 14.7p at 487.7p, Randgold Resources down 142p at 5,572p, and Pearson down 9.8p at 733p.