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US talks fail to inspire investors

Markets end on downbeat note despite Trump’s China lift

Markets defied hopes of ending the year on a high note and the UK blue-chip index ended its worst year since the 2008 financial crisis in the red.

A strengthening pound exerted a downward pressure on exporter shares, offsetting signs of improving relations between the US and China.

US President Donald Trump said over the weekend that he had a “very good call” with Chinese President Xi Jinping about trade.

The FTSE 100 opened 10 points higher (0.15%) in thin trade in what was a truncated session, while other European markets were flat in the absence of much corporate news.

However, the FTSE 100 closed 5.84 points (0.87%) lower on the final trading day of the year, closing at 6,728.13, while the FTSE 250 added 0.2%.

The two key indices suffered their worst year since the 2008 financial crisis, falling 12.5% and 15.6%, respectively.

On Saturday Mr Trump said: “Just had a long and very good call with President Xi of China. Deal is moving along very well. If made, it will be very comprehensive, covering all subjects, areas and points of dispute. Big progress being made!”

A statement on Sunday from China foreign ministry spokesman Lu Kang confirmed Mr Trump’s trade optimism.

“China stands ready to work with the US to implement the important consensus reached by President Xi Jinping and President Trump in Argentinaa, expand co-operation on the basis of mutual benefit, manage differences on the basis of mutual respect,” Lu said.

However, investors have one concerned eye on a weakening Chinese economy. The National Bureau of Statistics’ official manufacturing purchasing managers’ index printed at 49.4 this month from 50.0 in November, falling short of expectations for a reading of 49.9 and marking the lowest level since February 2016.

The Shanghai composite index has crashed by 25% this year. The market is closed today, as China prepares for the New Year celebrations.

In London, Sir Martin Sorrell’s new marketing communications venture S4 Capital has reported soaring revenues as the advertising tycoon continues to take the challenge to his former firm WPP.

S4 Capital booked a 40% rise in gross profit and operating earnings at the MediaMonks agency up nearly 118% in the year to the end of November. Like-for-like revenues grew over 51% and the group said it is trading in line with expectations.



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