By Shashwat Awasthi
(Reuters) - London's main index on Monday marked its best session in more than 10 months, as investors cheered a preliminary U.S.-China trade deal amid hopes of an orderly Brexit after UK Prime Minister Boris Johnson's landslide election victory.
FTSE 100 (FTSE) was up 1.7% by 0909 GMT, its best session since Feb. 5, lifted by trade-exposed stocks such as HSBC (L:HSBA), Burberry (L:BRBY) and miners, after U.S. Trade Representative Robert Lighthizer said a 'phase-one' deal was "totally done".
Global equities advanced as investors breathed a sigh of relief after a thaw in the trade dispute. Some tariffs on Chinese goods were also rolled back in exchange for increased Chinese purchases of U.S. agricultural, manufactured and energy products over the next two years, setting the FTSE 100 on path for its fourth straight session of gains.
"A Christmas truce for now is supporting risk sentiment," Markets.com analyst Neil Wilson said.
The FTSE 250 (FTMC) rose 0.6%, trading a notch below a record high hit in the previous session, on upbeat sentiment after Johnson stormed to a victory last week.
Victory for the Conservative Party has reassured markets that Britain is likely to be headed for a swift exit from the European Union, dispelling some uncertainty after 3-1/2 years of chaos and spurring a rally across domestic sectors.
"You are going to have a combination of both international investors putting money into the UK market ... plus within the UK you are going to have more commitment of capital to projects and businesses than we've had previously," said Scott Theil, chief fixed income strategist, BlackRock (NYSE:BLK) Investment Institute.
Domestically focussed firms continued to profit from the election euphoria, with Barclays (L:BARC) jumping more than 3% and RBS (L:RBS) adding 2.6%.
Exporter stocks such as BAT (L:BATS) and Diageo (L:DGE), which bore the brunt of a soaring pound on Friday, rebounded sharply.
Notable corporate news-driven moves were limited to midcaps.
Mike Ashley's Sports Direct (L:SPD) surged 18% after the retailer posted an upbeat first-half earnings.
Africa-focused Tullow Oil (L:TLW) dropped 11% after ratings agency S&P Global downgraded its long-term credit rating and HSBC downgraded the stock.
Shares of Cineworld (L:CINE) slipped 3% after the cinema operator announced a $2.1 billion takeover of Canada's Cineplex Inc (TO:CGX), which would make it the largest cinema operator in North America.
"The purchase is set to be financed by the raising of more debt which, given that the company's total debt has already risen sharply since 2017, does raise questions as to whether management are over reaching," CMC Markets analyst Michael Hewson said.