By Siddarth S, Rupali Chaudhary and Khushi Singh
(Reuters) -UK stocks closed at a one-week high on Thursday boosted by travel and luxury companies as China lifted pandemic-era curbs on foreign group tours, while a moderate increase in U.S. July inflation data boosted gains.
The FTSE 100 index added 0.4% while more domestically-focused FTSE 250 stocks rose 0.3%.
Travel and leisure shares rose 1.4% as China lifted bans on group tours for more countries, including Britain.
"This is huge for travel companies, which are in desperate need of a boost as they've been severely impeded for many years now. This is another step to return to normality," said Michael Baker, head of UK premium clients, at Capital.com.
Adding to the optimism, U.S. inflation increased moderately in July amid lower costs for goods, fuelling hopes the Federal Reserve could leave interest rates on hold next month.
The personal goods index was the session's biggest gainer, rising 2.9%, led by British luxury fashion brand Burberry Group (LON:BRBY) after Bernstein increased price target on the stock.
Shares of Persimmon (LON:PSN) gained over 2.2% after the UK housebuilder said it expects annual profit to be in line with expectations.
Banks stocks Barclays (LON:BARC), Natwest (LON:NWG) Group, HSBC Holdings (LON:HSBA) were down between 0.6% and 1.2% as they traded ex-dividend.
Industrial metal miners fell 1.0%, with Rio Tinto (LON:RIO)'s 3.3% drop weighing on the sector as the mining company's shares traded ex-dividend.
Among the companies reporting results, Deliveroo gained 3.5% as the food delivery firm lifted its earnings guidance for current financial year.
Savills (LON:SVS) dipped 10.7% after the real estate adviser "reduced" its annual expectations as it posted a 72% slump in half-year profit.
Petrofac (LON:PFC) slipped 4.5% after UK oilfield services provider reported a half-yearly loss.
Spirax-Sarco shares fell 2.3% after it reported first-half profit and revenue below expectations.