FTSE 100 and European markets rise as Wall Street rally continues – as it happened

Hopes that US and China can reach agreement on trade lifts investor confidence

2.48pm BST

Signs that the US and China could be talking behind the scenes about avoiding a trade war have given global markets a lift after last week's slump.

European markets, which had missed out on Monday's gains, have moved sharply higher today, with the FTSE 100 currently up around 2%, Germany's Dax 1.7% better and France's Cac climbing 1.3%.

2.33pm BST

The rally on US markets on Monday which saw the Dow Jones Industrial Average add nearly 700 points has continued at the opening of trading.

The easing of fears over a possible trade war between the US and China has lifted the Dow another 50 points or 0.2%, while the S&P 500 opened up 0.3% and the Nasdaq Composite up 0.48%.

2.19pm BST

Sterling is falling back after its recent strong run after last week's agreement between the UK and EU on a Brexit transition deal.

A spate of profit taking has seen the pound fall 0.8% against the dollar to $1.4114 and 0.3% against the euro to a1.1399.

2.04pm BST

The UK economy is steadying after the initial fallout from the vote to leave the European Union, according to our monthly Brexit watch series. Richard Partington reports:

As the one-year countdown to Brexit looms, the British economy is showing signs of steadying from the fallout triggered by the EU referendum, according to a Guardian analysis of economic news over the past month.

After progress with Brussels towards a two-year transitional deal to smooth Britain's formal exit from the EU on 29 March 2019, the pound has risen back towards the highest levels seen since the leave vote.

Related: The Brexit economy: light at the end of the tunnel?

Related: How has the Brexit vote affected the economy? March verdict

Related: 'There is progress but we could do better' - experts debate Brexit watch data

1.52pm BST

Following the collapse of BHS, the insolvency service has said it will bring proceedings to disqualify Dominic Chappell, who bought the department store group from Sir Philip Green from running a company for up to 15 years. Its full verdict:

We can confirm the Insolvency Service has written to Dominic Chappell and three other former directors of BHS and connected companies informing them that we intend to bring proceedings to have them disqualified from running or controlling companies for periods up to 15 years.

We can also confirm that we have written to Sir Philip Green, also a former director of BHS, informing him that we do not currently intend bring disqualification proceedings against him.

1.29pm BST

US Opening Calls:#DOW 24333 +0.54%#SPX 2672 +0.48%#NASDAQ 6816 +0.91%#IGOpeningCall

1.04pm BST

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12.41pm BST

Royal Bank of Scotland has made its first acquisition since its ill-fated purchase of ABN Amro which went sour during the financial crisis. PA has the details:

RBS has snapped up accounting software firm FreeAgent, marking the lender's first acquisition since its controversial crisis-era deal to buy ABN Amro.

The taxpayer-owned bank said it had agreed to buy the company for around 120p per share, valuing it at 53 million.

11.48am BST

Given Donald Trump's keenness on a strong stock market he may not want to really follow through on his trade war threats, suggest Craig Erlam, senior market analyst at Oanda

There are a lot of risks that financial markets have shrugged off over the last couple of years, to the amazement at times of investors, but the prospect of a trade war is clearly not one of these.

[This] has weighed heavily on risk appetite over the last couple of weeks with US equity markets posting significant losses on Thursday and Friday as things heated up. The message over the weekend though was far less confrontational and suggested the US would be open to scrapping the tariffs in exchange for certain other concessions such as reduced tariffs on important cars.

Wall Street rally = Trump tweeting about the stock market again.

40 tweets Oct. 1-Jan. 26 (market printing new high after new high)

1 tweet Jan. 27-March 23 (market falling)

1 tweet March 26 (Dow's third biggest point gain ever) pic.twitter.com/zHcs22gkOc

11.02am BST

European markets continue to gain ground.

With the Dow Jones Industrial Average expected to open around 170 points higher, the FTSE 100 is now up 140 points or 2%, Germany's Dax is 2.01% higher and France's Cac has climbed 1.5%.

10.35am BST

The outlook for the eurozone economy could well become less benign over the summer as uncertainty impacts sentiment, says Bert Colijn, senior eurozone economist at ING Bank. And there is little in the latest confidence survey which will please the European Central Bank, he says:

This drop in the eurozone sentiment indicator from 114.2 to 112.6 rounds out the second month of disappointing survey data for the Eurozone.

While the economy continues to perform strongly, some clouds have reemerged on the horizon. Trade war concerns take centre stage and are adding uncertainty to the outlook for businesses and impacting the view on the general economic situation for consumers. Both manufacturers and the service sector experienced declining sentiment. Consumer confidence was unchanged after a large drop in February as lower expectations for inflation offset a weaker view on the economy and household finances.

10.12am BST

European businesses have become more downbeat, according to the latest snapshot of economic sentiment.

The European Commission's index for the eurozone fell to 112.6 in March from 114.2 in the previous month, below estimates of a level of 113.4. There was decline optimism among the manufacturing, service and retail sectors, but the construction sector showed a small improvement.

The marginally stronger decrease of the headline indicator for the EU (-1.9) was mainly due to the marked deterioration of sentiment in the largest non-euro area EU economies, the UK (-4.2), and Poland (-2.0). In line with the euro area, confidence deteriorated strongly in industry, services, and retail trade, while it increased slightly in the construction sector and remained unchanged among consumers.

9.37am BST

Back with GKN and the hostile bid from Melrose, union Unite has repeated its opposition to the proposed takeover. In a letter to GKN shareholders it lists a number of reasons why:

We do not believe this bid is in the long-term interest of GKN and are concerned that it would jeopardise the company's future. The choice facing investors is between a long-term future for GKN or a short-term, high-risk approach from Melrose. We therefore ask you not to accept Melrose's offer.

9.07am BST

So far it seems there may not be any profit taking when Wall Street opens later, despite Monday's near 700 point surge on the Dow Jones Industrial Average.

The futures are pointing to a 100 point plus rise on the Dow in early trading, which should continue to give some support to European markets. Michael Hewson, chief market analyst at CMC Markets UK, said:

US markets look set to build on yesterday's gains despite their biggest one day gain in over 2 years, as trade concerns move further into the background. Shares in focus are likely to include Facebook which, despite dropping below $150 for the first time since July last year, still managed to close higher on the day.

8.52am BST

Ahead of Thursday's deadline for GKN investors to decide whether to accept the hostile 7.9bn bid from turnaround specialist Melrose or back the board, comes the daily update on the battle.

This time Melrose has made some commitments to try and keep interested parties - not least the UK government - happy. Reuters has the details:

Melrose on Tuesday pledged to own the Aerospace division of its bid target GKN for at least five years and to increase funding in apprenticeships and R&D in a last-ditch bid to win government backing for its hostile takeover.

In one of Britain's most hotly contested corporate battles for years, shareholders have until 1pm BST on Thursday to accept the hostile bid from turnaround specialist Melrose or GKN's plan to split off its auto unit and combine it with US group Dana, leaving GKN focused on Aerospace.

Melrose said it reserved the right to list the Aerospace division on the stock market however and added that were it to be approached by a strategic buyer in that time, it would seek the approval of the government to sell.

The group said it would also pump a further 10m into the company over five years to support the creation of between 100 and 150 new apprenticeships in engineering, technology and science, a key area of focus for the government which is promoting an industrial strategy as it leaves the EU.

Major government intervention. Business secretary Greg Clark insists on binding commitments from Melrose to secure continued investment and no sale of aerospace division for 5 years

8.34am BST

More downbeat news from the high street.

Fashion retailer H&M has reported a 61% fall in first quarter profits and said higher inventories would lead to increased markdowns in the second three months of the year. The Swedish company had already warned in February that weak demand would hit its earnings.

Last week's profit warning may have taken some of the sting out of the situation, but Moss Bros is already facing an uphill struggle for the remainder of its trading year.

8.14am BST

What a difference from last week... pic.twitter.com/OdTTC0sz1k

8.11am BST

After the rise on Wall Street and Asia as trade tensions between the US and China ease, European markets have followed suit.

The FTSE 100 is up 90 points or 1.3%, Germany's Dax has opened up 1.8%, France's Cac has climbed 1.35% and Italy's FTSE MIB is 1.48% better.

7.56am BST

Another factor for the renewed buoyancy in stock markets comes from North Korea, says Naeem Aslam, chief market analyst at ThinkMarkets :

Investors have reacted positively to the surprise visit of North Korea's leader Kim Jong Un to China. This is his first trip outside his country since he became the leader of his country. Traders are considering this event as a further evidence of de-escalation of tensions in the Asia region.

7.44am BST

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

A surge on Wall Street has lifted Asian markets and is expected to do the same for European shares, as investors become increasingly convinced the US and China can resolve their trade issues.

The rebound in the US [came] as China moved to assuage US concerns about its trade policies by pledging to open up its markets to external companies. Chinese officials also pledged to overhaul protection for intellectual property rights. There was also an offer to buy more US semiconductors, as well as offering to finalise rules that would allow foreign financial firms to take stakes in Chinese securities companies, along with talk of lowering the tariff that is levied on US car imports of 25%

These concessions while fairly modest would allow the US administration to claim progress on changing the status quo where trade is concerned and could pave the way for further discussions further down the line.