EUROPEAN shares moved a leg higher on Wednesday as positive sentiment in the US acted as a tonic to investor confidence, driving the FTSE 100 into positive territory.
London's premier index ended the day up 76.6 points, or 1.09%, at 7,117.28.
It followed a mixed set of US midterm election results, which saw the Republicans lose control of the House of Representatives but keep control of the Senate.
David Madden, market analyst at CMC, said: "Stock markets are higher as the positive sentiment in the US has boosted investor confidence on this side of the Atlantic.
"The rally on the back of the midterms acts as a nice continuation to the bounce back that started last month."
However, he cautioned: "The politics of the US acts as a nice distraction today, but it doesn't change that fact that investors are still concerned about the budget situation in Italy, and the US-China trade spat."
In stocks, ITV ended the day bottom of the index after the broadcaster said advertising revenues are coming under pressure amid economic uncertainty as Brexit worries take their toll.The group behind hit shows including Love Island and I'm A Celebrity said total advertising revenues rose 2% in the first nine months of the year.
But it warned an "increasingly uncertain economic environment" is set to see total ad revenues fall around 3% in the fourth quarter and be broadly flat over the full year.
Shares ended the day 4.25p down at 150p on the gloomier ad outlook.
Marks & Spencer shares also took a hit after the high street titan warned of a bleak outlook for sales growth as it reported a decline in half-year revenue.
The retailer surprised the market with a higher profit figure, but revenue dropped by 3.1% to £4.96 billion, reflecting declining sales in both the food and clothing and home divisions.
M&S said it does not expect much improvement in sales in the near future, as it deals with "the growth of online competition and the march of the discounters".
The company's stock closed down 1.6p at 300.9p.
The pound was in buoyant mood, gaining 0.3% versus the US dollar at 1.314. Against the euro, sterling was flat at 1.146.
But Mr Madden said the gains were linked to a weaker dollar rather than any Brexit breakthrough.
"GBP/USD was also lifted by the weak US dollar.
"As per usual, Brexit chatter continues to do the rounds, but we are still none the wiser about the situation. The pound has firmly moved beyond the 1.3000 mark, but it might find its gains will be limited as uncertainty lingers," he said.
A barrel of Brent crude was trading at $72, an increase of 0.7%.
The biggest risers on the FTSE 100 were NMC health up 144p at 3,500p, Associated British Food up 105p at 2,565p, Melrose Industries up 6.5p at 174p and Fresnillo up 319p at 902p.
The biggest fallers on the FTSE 100 were ITV down 4.25p at 150p, Royal Mail down 5p at 348p, Direct Line down 4.1p at 318.6p and GVC down 8.5p at 883p.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here