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FTSE Moves Higher

Despite weak fourth quarter GDP data, British stocks were moving higher Monday morning, amid renewed optimism about U.S.-China trade talks.

The FTSE 100 index is up 66.33 points, or 0.94%, at 7,137.51, off the day's high of 7,149.23.

On Friday, the index ended 0.32% down at 7,071.18.

Shares of Smith & Nephew plunged sharply this morning on reports the company is in discussions to buy NuVasive, a U.S.-based surginal instruments maker. The deal is said to be worth more than US$3 billion.

TUI AG is gaining nearly 5%, bouncing back after recent losses. The stock tumbled last week after the company warned about it earnings.

British American Tobacco is rising 2.75%. Mining stocks BHP, Glencore and Rio Tinto are moving notably higher.

In economic news, the UK economy expanded at its slowest annual rate in six years in 2018, following a sharp contraction in December.

In 2018, the economy grew 1.4%, down from 1.8% a year earlier, data from the Office for National Statistics showed.

Growth in October - December 2018 slowed, falling to 0.2%, from 0.6% in the preceding quarter, due to Brexit uncertainty and slowing global economy.

Post release of economic data, the Pound Sterling weakened to $1.2895 and is currently at $1.2903, down by about 0.3% from previous close.

The sterling declined 0.24% against the euro to 1.1405 after opening at 1.1426.

On the Brexit front, responding to Jeremy Corbyn's letter that set out his demand for a Brexit deal, British Primer Minister Theresa May said she welcomed more talks with Labour on a Brexit agreement, especially on how alternate arrangements to the Irish backstop could work.

May wrote, "It is good to see that we agree that the UK should leave the European Union with a deal and that the urgent task at hand is to find a deal that honours our commitments to the people of Northern Ireland, can command support in Parliament and can be negotiated with the EU - not to seek an election or second referendum."

On U.S.-China trade deal news, preliminary lower level talks have resumed.

Later this week, U.S. Treasury Secretary Steven Mnuchin and other U.S. officials are scheduled to travel to Beijing to continue trade negotiations. Last week, U.S. President Trump had ruled out meeting the Chinese President Xi Jinping anytime before the expiry of March 1 deadline.

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