UK stock indexes bounced to three-week highs on Friday, lifted by positive US jobs data and news of a new round of talks between Beijing and Washington that raised hopes of a resolution to their protracted trade spat. The FTSE 100 surged 2.2 percent and the FTSE 250 gained 2.1 percent to bag their biggest weekly gains in two months, showing resilience to a slew of bad macroeconomic and corporate news from China and the US in the first few days of 2019.
Beijing said it would hold vice ministerial-level trade talks with Washington next week, pushing Asian shares higher and easing nerves of investors who have worried that the tussle between the world's two largest economies will slow the global economy.
"The landscape has changed recently and, given the sell-off in US stocks, and the continued weakness in Chinese equities in the past couple of months, both sides may take a softer approach to the talks," said David Madden, analyst at CMC Markets.
Cheer from update on the trade scenario was magnified by strong US jobs data and Fed chair Jerome Powell saying the central bank will be sensitive to the downside risks the market is pricing in.
That helped sectors across the UK to end the session in black.
British stocks with more exposure to Asia rose, with HSBC and Standard Chartered adding 2.4 percent and 3.9 percent, respectively, while luxury goods maker Burberry gained 4.6 percent.
Mondi jumped 5.6 percent after Jefferies analysts said the company was its top pick in the paper and packaging sector, while Whitbread rose 1.7 percent after a Barclays rating upgrade.
Miners saw a strong comeback after a dismal last session, with Glencore, Rio Tinto, BHP, Anglo American and Antofagasta all up between 4.1 percent and 6.5 percent on the back of higher copper prices.
Oil prices also rose after news of the upcoming trade talks, boosting heavyweights BP and Shell by 2.3 percent and 1.1 percent.
Among the rare fallers, Fresnillo was 1.5 percent lower at the bottom of FTSE 100 as gold prices fell with investors coming back to equities, and J Sainsbury fell 1.1 percent after an HSBC downgrade.
There was little news on mid-cap companies, although the index is likely to come into focus soon as a parliamentary vote on Prime Minister Theresa May's disputed Brexit deal is on the horizon in the next two weeks.
A survey on Friday suggested that a majority of May's Conservative Party members oppose her Brexit deal with the European Union, less than three months before Britain is due to leaves the bloc.
Elsewhere, house-builder shares shrugged off dismal house price data and gained on a Times report that said demand may improve if a Brexit deal is struck.
Persimmon, Berkeley, Barratt and Taylor Wimpey all rose 2-3 percent on the main index while mid-caps Bovis Homes and Bellway rose 1.8 percent and 2.5 percent, respectively.
"Any chance, however slim, that either the current deal may survive, or even perhaps that Brexit effectively doesn't happen, supports Brexit-sensitive sectors like homebuilders," said Ken Odeluga, City Index analyst.
However, there was little optimism as data on house prices, consumer lending, mortgage approvals and services sector all pointed to a slowdown ahead of Brexit.
The small-cap Circassia Pharmaceuticals dipped 16 percent to a record low after restating its 2019 targets, but recovered some ground to end 9.1 percent down.
AIM-listed Gear4music, which says it is Britain's largest musical instrument and equipment retailer, sank 53 percent after saying it expects lower 2019 core earnings.