UK shares jumped to their highest in almost a month on Tuesday amid hopes of a US-China trade deal and as supermarket chain Tesco led a revival in retailers after upbeat sales data that helped offset Morrisons’ disappointing holiday update. Investors pinned hopes of a possible truce in the protracted trade dispute as US Commerce Secretary Wilbur Ross said overnight the world’s two biggest economies could reach a trade deal as talks in the Chinese capital continued.
But uncertainty around the UK’s tumultuous divorce from Europe and ahead of a Parliamentary vote next week on a draft deal continued to weigh on sentiment, keeping many investors on the sidelines. Volumes were just 22 per cent of the 90-day average daily turnover. British and European officials are discussing the possibility of extending the formal exit process amid fears that Prime Minister Therea May’s deal will not be approved by March 29, reports said.
While the data showed that discount shops Aldi and Lidl gained market share, overall grocery sales in the 12 weeks to Dec 30 rose 1.6 per cent, according to Kantar Worldpanel. The sector FTNMX5330 rose 2 per cent to its highest since Dec. 7, led by Tesco after it chalked up a gain of 0.4 per cent in the three months. The market leader, which will publish its holiday trading update on Thursday, was crowned Xmas winner. The data also lifted Next and Marks & Spencer more than 4 per cent and comes after positive updates from Aldi UK and other high street chains that brought back some appetite for consumer shares and bucked the high street woes.