By Muvija M and Safia Infant
(Reuters) - A combination of stimulus hopes from China's surprise lending rate cut and optimism at home ahead of the December snap election helped UK stocks rake in explosive gains and outperform other global peers on Tuesday.
The FTSE 100 (FTSE) climbed 0.8% higher, led by a 9% surge in safety equipment maker Halma (L:HLMA) after an upbeat half-year report. The FTSE 250 (FTMC) held on to a 14-month high as it surged nearly 1% by 0920 GMT.
Domestic stocks have been buoyed in recent sessions as traders placed their faith in the ruling Conservative Party to win the December election and deliver Brexit.
The mid-caps were also supported by a 4% gain in Cobham (L:COB) after the British government said it was minded to allow private equity group Advent's purchase of the defence company.
Lights manufacturer Dialight (L:DIAL) plunged 20.4% to its lowest in nearly a decade on the small-cap index after it warned on profit due to the U.S.-China trade war.
On the trade front, markets still await concrete details on whether progress has been made towards a resolution. A CNBC report on Monday termed Beijing's mood about a deal as "pessimistic".
However, sentiment somewhat eased after Washington issued a new 90-day extension allowing U.S. firms to continue doing business with China's Huawei.
"Talks have collapsed before though and could again, the key difference this time though being that Trump will not want to go into an election without a deal," OANDA analyst Craig Erlam remarked.
Leading gains among mid-caps was Puretech Health (L:PRTC) which soared 16.5%, a day after a schizophrenia drug from its affiliate, Karuna Therapeutics (O:KRTX), met the main goal in mid-stage trial.
Budget airline easyJet (L:EZJ) advanced 4.2% after posting annual profit towards the top end of its expectations. The carrier also announced its intention to operate net-zero carbon flights across its network.
"While headwinds from fuel are set to continue, the outlook is for a more supportive unit revenue environment," Liberum analysts wrote.
Outsourcing firm Equiniti (L:EQN) headed for its worst day on record after a profit warning, tumbling 8% to the foot of the FTSE 250.