By Shashwat Awasthi
(Reuters) - London's FTSE 100 shrugged off the impact of the latest U.S.-China tariffs on Monday as AstraZeneca gained and exporter stocks rose after sterling slipped on the prospect of an election against the backdrop of Brexit.
The main index (FTSE) gained 0.9%, boosted by a 2% rise in AstraZeneca (L:AZN) after separate trials showed its drugs helped patients with cardiovascular conditions.
The mid-cap FTSE 250 (FTMC) rose 0.3% by 0815 GMT, though trading volumes on both UK indexes were thin due to a U.S. market holiday.
Shares of companies that book a major chunk of their earnings in U.S. dollars such as Diageo (L:DGE), Unilever (L:ULVR) and tobacco firm BAT (L:BATS) advanced as dealers sold off the pound ahead of a showdown this week between the government and the lawmakers opposed to a no-deal Brexit.
Prime Minister Boris Johnson threatened to purge any lawmaker in his party who votes against the government on Brexit, as he looks to make good on his promise of delivering Brexit on Oct.31, with or without a deal.
"If the rebels and 'Remainers' want to stop the no-deal Brexit, then this is the time," Markets.com analyst Neil Wilson said.
The latest volley of tariffs between Washington and Beijing was also spurring some defensive buying, according to Wilson.
Escalating worries over global trade and a looming recession weighed on the FTSE 100 in August, as it recorded its sharpest monthly fall since October. Meanwhile, fears of a no-deal Brexit had led the mid-caps to their first monthly fall since May.
"Gains may be fragile," Wilson said of the FTSE 100's rise on Monday. "After a rough August though, traders should buckle up for more volatility in September."
Heavyweight miners Rio Tinto (L:RIO) and Glencore (L:GLEN) rose after China's pledge to support its economy supported iron ore prices and nickel prices rose on Indonesia's move to expedite ore exports ban.
On a low-key day for corporate news, Marks & Spencer (L:MKS) shed 1.2% after Goldman Sachs (NYSE:GS) reinstated coverage on the stock with a 'sell' rating, saying recent trading patterns in the retailer "continued to be disappointing".