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FTSE 100 Gains Ground As Pound Slips

U.K. stocks rose sharply on Friday, with hopes for a U.S.-China trade deal as well as merger & acquisition activity helping underpin investor sentiment.

Trade optimism prevails after U.S. President Donald Trump said that trade talks with China were "moving right along", and that the two sides are having very major discussions".

Asked whether he will go ahead with additional tariffs in less than two weeks, Trump said, "We're not discussing that."

The British pound sipped from a seven-month high hit Thursday on expectations that next week's election will give the Conservative Party the parliamentary majority it needs to deliver Brexit.

The benchmark FTSE 100 was up 60 points, or 0.85 percent, at 7,198 after losing 0.7 percent on Thursday.

Phoenix Group Holdings shares rose over 1 percent after the company agreed to buy Swiss Re AG's U.K. insurance unit ReAssure Group Plc.

BP Plc advanced 0.7 percent after it reached an agreement with Lightsource BP, under which BP will acquire newly-issued equity in Lightsource BP to create a 50:50 joint venture structure.

FirstGroup gained 0.9 percent after the competition watchdog accepted its remedies for competition problems on the West Coast Rail franchise.

Vodafone Group edged up slightly after saying it is taking many initiatives, including half-sized SIM cards and eco-friendly accessories to reduce the use of plastic and the related environmental impact.

Primark-owner Associated British Foods added nearly 1 percent. The company said it expects progress, on both a reported and an IFRS 16 adjusted basis, in adjusted earnings per share for the group for fiscal 2020.

In economic releases, U.K. house prices increased at the fastest pace in seven months in November, data from the Lloyds Bank subsidiary Halifax and IHS Markit showed.

House prices increased 2.1 percent on a yearly basis in three months to November, following a 0.9 percent rise in three months to October. Economists had forecast an annual growth of 1 percent.

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