FTSE hits one-month high on U.S.-China trade deal hopes

By Shashwat Awasthi

(Reuters) - London's FTSE 100 surged nearly 1% to a more than one-month high on Monday as heavyweight banks, miners and oil stocks were driven higher by hopes of a trade deal between the United States and China.

The FTSE 100 <.FTSE> added 0.9%, its best day in almost two weeks, boosted by BP <BP.L> and Shell <RDSa.L> as well as Asia-focussed HSBC <HSBA.L> and Prudential <PRU.L>. Miners <.FTNMX1770> jumped almost 3% to their highest since mid-September.

The blue-chip index joined a global stocks rally triggered by signals from Washington and Beijing that they had made progress towards resolving a nearly 16-month-long trade war that has roiled the global economy.

Updates on Sino-U.S. trade talks have been a major source of volatility for the FTSE 100 this year. They helped the index hit a more than nine-month high in July, but then drove its sharpest monthly fall in 10 in August when tensions escalated.

"Of course, we've had plenty of warm words before that have delivered very little but things seem to finally be moving," OANDA analyst Craig Erlam said.

The FTSE 250 <.FTMC> advanced 0.5%, though gains were limited by steep drops in gambling firms after a cross-party group of UK lawmakers called for measures to overhaul online casinos.

Shares of GVC <GVC.L>, William Hill <WMH.L> and 888 Holdings <888.L> shed between 10.5% and 13.7%, enduring their worst day in months.

Among notable gainers were London-listed shares of Ryanair <RYA.L>, which jumped 8.2% for their best day since December 2014, after the Irish airline's first half profit beat analysts' consensus forecast.

"A positive takeaway is that management confidence has increased," Cityindex analyst Ken Odeluga said. "The shares signal that investors believe delayed plane deliveries as well as potential further strike disruption have been adequately priced for the moment."

Mid-cap budget airlines easyJet <EZJ.L> and Wizz Air <WIZZ.L> rose 3.8% and 1.5%, respectively.

Baby products retailer Mothercare <MTC.L>, which has shut a third of its British stores in the past year and lost nearly half its share value this year, sank another 26% after saying it intended to appoint administrators for its UK operations.

Small-cap Woodford Patient Capital Trust <WPCT.L>, founded by beleaguered money manager Neil Woodford, dropped nearly 8% after the fund cut the valuation of one of its major holdings.

(Reporting by Shashwat Awasthi in Bengaluru; Editing by Saumyadeb Chakrabarty and Mark Potter)