UK Markets closed

UK stocks up on China tariff cut, but Royal Mail at life low

By Shashwat Awasthi and Muvija M
FILE PHOTO: People walk past the London Stock Exchange Group offices in the City of London, Britain

By Shashwat Awasthi and Muvija M

(Reuters) - UK shares advanced for a fourth straight session on Thursday as risk sentiment picked up after China pledged to halve tariffs on some U.S. imports, though Royal Mail slid to an all-time low after warning of a challenging year ahead.

China will cut additional tariffs levied against 1,717 U.S. goods last year, after a Phase 1 trade deal was signed last month, and as fears persist over the coronavirus outbreak, which has killed more than 550 people.

The FTSE 100 <.FTSE> rose 0.3%, but oil majors Shell <RDSa.L> and BP <BP.L> weighed on the index as they tracked crude prices lower.

The FTSE 250 also added 0.3%, with insurer Beazley leading gainers with an 8% jump - its best one-day gain since 2009 - after its annual profit surged.

Royal Mail <RMG.L>, on the other hand, dropped 5% to an all-time low after the letter carrier warned outlook for the 2020-21 fiscal year was "challenging" and said the threat of a labour strike in late 2019 hurt parcel revenue growth during the Christmas period.

The company's strained relationship with the CWU union, which has called for a strike ballot, "bodes ill for both business as usual productivity improvements and reaping the benefits of the medium-term strategy," Liberum analyst Gerald Khoo wrote.


BULL MOMENTUM

Global markets have been attempting a recovery after sharp losses last week, and were given a shot in the arm on Wednesday by media reports that scientists had developed a drug against the China-linked virus.

Though the World Health Organisation played down the reports, hopes that the outbreak would soon be contained as well as upbeat economic data from the United States helped boost stock bourses.

"The momentum is clearly with the bulls at the moment, and we see no reason to stand against that tide," OANDA analyst Jeffrey Halley said.

"The potential for an aggressive and rapid correction lower still lurks though, if negative Wuhan virus headlines emerge," he warned, adding that economic data for January was yet to show any severe spillover in growth from the virus.

GlaxoSmithKline <GSK.L> slipped 2.6%, following a more than 4% drop in the previous session when its fourth-quarter earnings missed analysts' estimates.

NMC Health <NMC.L>, whose shares have been battered after criticism from short-seller Muddy Waters late last year, took a U-turn to end 7.2% lower after soaring as much as 13% in early deals.

However, catering group Compass Group <CPG.L> added 3% and was among top blue-chip risers after upbeat quarterly report.


(Reporting by Shashwat Awasthi and Muvija M in Bengaluru; Editing by Bernard Orr, William Maclean)