FTSE 100 rebounds as geopolitical tensions ease between US and North Korea

The blue-chip index of leading shares fell sharply last week after US President Donald Trump issued a series of bellicose statements aimed at Pyongyang

The FTSE 100 ended its losing streak on Monday, closing up 0.6 per cent on the day (Getty)

The FTSE 100 ended its losing streak on Monday, closing up 0.6 per cent on the day as rhetoric between the US and North Korea cooled.

The blue-chip index of leading shares fell sharply last week after US President Donald Trump issued a series of bellicose statements aimed at Pyongyang.

At the close, the index was up 43.93 points on Monday at 7,353.89. The biggest gainer was tour operator Tui, which rose 4.8 per cent on the day to close at an all-time high after a favourable analyst note from Credit Suisse.

Internationally-exposed stocks had suffered the most after Mr Trump stoked geopolitical tensions with his threat to unleash “fire and fury” on North Korea. But on Monday they saw some of the largest rises, with Asia-focused lender Standard Chartered and miners Glencore and BHP Billiton all among the FTSE’s top performers.

The mid-cap FTSE 250 market gained, adding 147 points to finish the day at 19,692, while European indexes also recovered to finish in positive territory. The pan-European STOXX 600 ended the session 1.1 per cent higher, its best single-day performance in a month, while the blue-chips STOXX 50 jumped 1.3 per cent.

Banks were among the top-gaining sectors, up 1.5 per cent, with Banco de Sabadell, Deutsche Bank and Commerzbank all up between 3.1 and 3.6 per cent.

"European equities enjoyed a massive bounce back today, as the political situation between the US and North Korea appears to be improving, said David Madden, market analyst at CMC Markets.

"The standoff is far from over, but traders are taking their cues from Washington DC which is hoping to pursue a political end to the tense situation."

On the foreign exchange markets, the pound was down 0.22 per cent against the dollar to $1.2982 and up 0.09 per cent against the euro at 1.1014 euros.

Analysts from Morgan Stanley last week predicted the pound will fall below parity with the euro for the first time in its history by early next year as prospects on the Continent improve and the UK outlook worsens.

Weak economic growth and increased political uncertainty as EU divorce talks show little signs of progress, will weigh on the UK currency, Morgan Stanley said on Friday.