The London market reopened on Tuesday in the midst of a week expected to be dominated by central bank policy decisions, while the FTSE 100 got an early boost from a positive set of maiden results for GSK-spinoff Haleon.
The BoE will announce its interest rate decision on Thursday, a day after the US Fed unveils its own decision. The BoJ and SNB rate decisions also will come on Thursday.
The FTSE 100 index was up 74.97 points, or 1.0%, at 7,312.64 early Tuesday. The mid-cap FTSE 250 index was up 11.34 points, or 0.1%, at 18,807.76. The AIM All-Share index was down 0.64 points, or 0.1%, at 862.62.
The Cboe UK 100 index was up 0.8% at 862.62. The Cboe 250 was down 0.2% at 16,163.15, and the Cboe Small Companies up 0.7% at 12,775.61.
In the FTSE 100, Sports Direct-owner Frasers said Mike Ashley will not be standing for re-election as a director and will therefore stand down October 19. Ashley is the founder and 69% majority shareholder of Frasers.
Shares in Frasers were down 0.1% in early morning trade.
‘Since Michael Murray took over the leadership of Frasers Group earlier this year, the business has gone from strength to strength,’ Ashley said. ‘It is clear that the Group has the right leadership and strategy in place and I feel very confident passing the baton to Michael and his team.’
He added: ‘My commitment and support as a Frasers' shareholder is as strong as ever.’ Frasers said Ashley will provide the company with £100 million in additional funding on the same terms as its existing unsecured borrowing facilities. The money will be put towards the company’s ‘elevation’ strategy of shop upgrades.
Kingfisher shares were down 1.7%. The DIY retailer reported a decline in interim sales and pretax profit as it faced a more challenging environment and strong previous year comparators.
Sales in the six months that ended July 31 totalled £6.81 billion, down 4.1% from £7.10 billion a year previous. Pretax profit totalled £474 million, down 30% against £677 million.
Kingfisher noted an ‘encouraging’ start to trading in the second half of the year, however.
Consumer healthcare firm Haleon rose 1.5% as it posted a strong performance in the first half of 2022, in its first earnings report since being split from GSK and separately listed.
Haleon reported a pre-tax profit of £864 million, up 17% from £736 million the previous year. Revenue totalled £5.18 billion, up 13% from £4.58 billion.
In the FTSE 250, Moonpig dropped 7.6%. The online greeting card and gifting platform said its overall trading performance from May was been in line with expectations. As a result, the firm reiterated its full-year guidance.
Moonpig said average order values in the period have increased year-on-year and margins have remained ‘resilient in the absence of any significant pressure from input cost inflation’.
It added that it expects the business to return to pre-Covid seasonality, with between 58% and 60% of revenue anticipated to arise in the second half of its financial year.
Elsewhere in London, software developer Alfa Financial Software jumped 6% as it increased its expectations for the full-year thanks to improved contractual certainty and strong trading since its half-year results announcement at the start of September.
Alfa explained it achieved improved contractual certainty with two clients and received requests for additional people on other projects.
In addition, Alfa said its performance in August was ‘very strong’ with chargeable days at a ‘record level’.
Sterling was quoted at $1.1445 early Tuesday, up from $1.1431 at the London equities close on Friday.
The euro traded at $1.0036 early Tuesday in London, up slightly from $1.0025 late Friday.
‘EUR-USD investors have to be patient for a little longer as the US central bank decision is not due until tomorrow. And as only second-tier data publications are due until then, EUR-USD is likely to trade sideways close to parity until the Fed meeting,’ said You-Na Park-Heger at Commberzbank.
Against the yen, the dollar was quoted at JP¥143.42, up from JP¥142.93.
The Nikkei 225 index in Tokyo closed up 0.4%.
Japan's core consumer price index hit 2.8% in August, the highest level since 2014, government data showed, as soaring energy prices bite. The figure for August was slightly above the 2.7% consensus forecast by experts, and comes on the heels of a 2.4% rise in July.
The last time such figures were seen, prices had been artificially bolstered by an increase in VAT. Excluding years when tax hikes impacted the rate, August's inflation was the fastest pace in nearly 31 years.
In China, the Shanghai Composite closed up 0.2% on Tuesday, while the Hang Seng index in Hong Kong was up 1.3% in late trade.
Hong Kong’s leader, John Lee, said he will soon make a decision on further relaxing coronavirus restrictions, as residents and businesses decry quarantine rules that have kept the finance hub cut off for more than two years.
Lee would not confirm that decision or commit to a firm timeline, however.
Hong Kong has adhered to a version of China's strict zero-Covid rules throughout the pandemic, battering the economy and deepening the city's brain drain as rival business hubs reopen.
The S&P/ASX 200 in Sydney closed up 1.3%.
Australia’s central bank expects implementing more interest rate hikes, but sees the case for a slower pace of increase as it seeks to keep the economy on ‘an even keel’ while fighting inflation, minutes from its latest meeting showed.
The RBA has increased the cash rate target earlier in September by half a percentage point to stand at 2.35% from 1.85% previously. This was the central bank's fourth consecutive 50 basis point rate hike since June.
The RBA said it is ‘resolute’ in bringing the level of inflation back to the target range of 2% to 3%, but remained mindful of the path needed to achieve this must account for the risks to growth and employment.
In mainland Europe, the CAC 40 in Paris was up 0.8% early Tuesday, while the DAX 40 in Frankfurt was up 0.9%.
Producer price inflation in Germany accelerated to another record high in August, data from the Federal Statistics Office showed.
In August, the producer price index increased by 45.8% compared to the same month a year prior, compared to a 37.2% increase in July, and well above consensus market expectations of a 37.5% hike, according to FXStreet.
The acceleration was due to energy prices, which more than doubled as a result of strong rises electricity and natural gas prices.
Brent oil was trading at $92.34 a barrel, up from $92.24 late Friday. Gold was quoted at $1,673.90 an ounce, lower than $1,677.01 on Friday.
Still in the economic calendar for Tuesday, there is Johnson Redbook retail sales index from the US at 1355 BST.
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