By Callum Keown
British stocks wrestled back some lost ground on Wednesday as trade tensions between the U.S. and China cooled.
The FTSE 100 looks set to halt its streak of six days of losses as the Chinese yuan stabilized, preventing further escalation of the trade war. Advancers included BAE and Royal Dutch Shell as gainers far outnumbered decliners.
he blue-chip index rose 0.7% and the more domestically focused FTSE 250 lifted 0.8%.
Gold prices jumped 0.5% to six-year highs of $1,472 per ounce as trade tensions caused investors to move towards safe haven assets.
Sterling dropped to $1.2143 as the threat of a no-deal Brexit was further ramped up.
What's moving the markets?
Despite the trade war threatening to become a currency war, with China allowing the yuan to fell below the key level of 7 to the dollar, talks between the world's two largest economies are still scheduled to go ahead next month.
China's central bank set the midpoint reference for the yuan at 6.9996 on Wednesday, slightly lower than expected.
In the absence of further escalation, and a stable yuan, British stocks made gains.
Christian Gattiker, head of research at Julius Baer, said investors would have to wait for a supportive policy response to lift stocks significantly.
He said: "The trouble for now is that policy response will take quite some time.
"The next big central bank platform is two weeks from now at Jackson Hole and U.S.-China trade talks will only resume in September."
Which stocks are active?
The U.K.'s largest listed fund manager Standard Life Aberdeen (SLA.LN) fell 5.8% after its first-half pre-tax profit dropped 10% to GBP280 million ($340.1 million). The company increased its assets under management by 5% to GBP577.5 billion and outflows slowed from the first half of 2018.
Litigation finance company Burford Capital plunged 50% after being attacked by U.S. short seller Muddy Waters . The research firm said it now holds a short position in Burford Capital and accused the firm of misrepresenting parts of its results.
Mining giant Glencore fell 1.8% as it reported a 32% drop in core profit as falling copper prices hit the commodities producer and trader. The Anglo-Swiss miner also revealed it would halt production at the world's largest cobalt mine . It said the economic viability of Mutanda, in the DRC, has been reduced due to lower cobalt prices.