Stocks in London on Tuesday were catching up with a strong bank holiday session in Europe, as investors returned from a long weekend.
Global markets got a boost on Monday, after Chinese regulators announced measures to boost the country’s stock markets, and investors reflected positively on the remarks from the Federal Reserve on Friday.
The FTSE 100 index opened up 116.73 points, 1.6%, at 7,455.31. The FTSE 250 was up 284.59 points, 1.6%, at 18,415.61, and the AIM All-Share was up 5.96 points, 0.8%, at 739.63.
The Cboe UK 100 was up 1.4% at 742.14, the Cboe UK 250 was up 1.5% at 16,089.35, and the Cboe Small Companies was up 0.1% at 13,426.98.
In early economic news, UK shop price inflation decelerated further in August, data showed on Tuesday, presenting some ‘better news for consumers’.
According to the latest British Retail Consortium-NielsenIQ tracker, the annual shop price inflation rate cooled to 6.9% in August from 8.4% in July. This was below the three-month average of 8.0% and the lowest rate since October 2022.
Food inflation slowed to 11.5% in August from 13.4% in July, while non-food inflation remained at 4.7%.
UK holidaymakers were also hit by travel disruption on Monday, which could last for days. Flights were cancelled leaving thousands of passengers stranded following an air traffic control technical fault.
By Monday afternoon, 232 flights departing UK airports had been cancelled and 271 arriving flights, according to aviation analytics firm Cirium.
On the back of the news, Ryanair lost 0.3% in Dublin. However, Wizz Air rose 3.1% and easyJet was up 2.0%.
The pound was quoted at $1.2619 early on Tuesday in London, higher compared to $1.2571 at the equities close on Friday. The euro stood at $1.0818, up against $1.0783. Against the yen, the dollar was trading at JP¥146.43, higher compared to JP¥146.27.
In the FTSE 100, Bunzl was the best performer, up 3.7%.
The London-based distribution services company reported revenue of £5.91 billion in the six months ended June 30, up 4.5% from £5.65 billion a year earlier. Pretax profit increased by 6.9% to £317.1 million from £296.6 million.
The company upped its interim dividend by 5.2% to 18.2p from 17.3p.
Also, Bunzl said it has signed an agreement to acquire a business in Poland, and also acquired a business in the Netherlands.
Rio Tinto rose 1.6%.
It said it has completed the agreement to sell a majority stake in the La Granja copper project in Peru to First Quantum Minerals, banking just over $100 million and gaining a partner who will invest another half billion into the project.
La Granja, located high in the mountains in Cajamarca, northern Peru, is one of the largest undeveloped copper deposits in the world, Rio said. It has an indicated and inferred mineral resource totalling 4.32 billion tonnes at 0.51% copper. First Quantum will become the operator of the mine.
The agreement to sell a 55% stake in La Granja to First Quantum was first announced back in March. Rio on Tuesday said the completion follows regulatory approvals from the government of Peru, from which the Anglo-Australian miner had purchased the project back in 2006.
In the FTSE 250, PureTech Health rose 4.2%.
The US-based biotherapeutics company’s pretax loss narrowed to $13.7 million in the first half of 2023 from $56.0 million a year earlier.
However, its revenue fell to $3.2 million in the first half of 2023, from $7.0 million.
Founder & Chief Executive Officer Daphne Zohar, said: ‘The first half of 2023 has been a strong period across both our Founded Entities and Wholly Owned Pipeline. We have achieved important clinical and financial milestones, while executing on our mission of giving life to new classes of medicine to change the lives of patients with devastating diseases.’
On London’s AIM, Pelatro plummeted 60%.
It said that it is seeking cancellation of trading of its shares, as it considers being listed to be no longer in the best interest of the company.
Pelatro noted the ‘considerable cost, management time and the legal and regulatory burden’ associated with its listing.
It also said that Chief Financial Officer Nic Hellyer has resigned.
Chair Harry Berry said: ‘Nic has been with Pelatro since before our IPO in December 2017 and has made a significant contribution to the growth of the company since then. We wish him well for his future endeavours.’
In Asia on Tuesday, the Nikkei 225 index in Tokyo closed up 0.2%. The S&P/ASX 200 in Sydney closed up 0.7%.
The Shanghai Composite closed up 1.2%, while the Hang Seng index in Hong Kong was up 1.9% in late trade. Chinese stocks extended Monday’s gains after China’s regulators decided to slash the tax paid on stock trades for the first time since 2008, and pledged to slow the pace of initial public offerings, which typically suck up market liquidity.
In European equities on Tuesday, the CAC 40 in Paris was up 0.2%, while the DAX 40 in Frankfurt was up 0.3%, having closed up 1.3% and 1.0% respectively on Monday.
German consumer sentiment is expected to worsen in September, according to new figures from GfK on Tuesday.
Pollster GfK said its forward-looking survey fell to minus 25.5 points in September from a revised minus 24.6 points in August. FXStreet-cited market consensus had expected the figure to come in at a slightly better minus 24.3 points.
‘The consumer sentiment is currently not showing a clear trend, neither downward nor upward – and that at a very low level overall,’ explained Rolf Burkl, GfK consumer expert.
‘The chances that consumer sentiment can sustainably recover before the end of this year are dwindling more and more. Persistently high inflation rates, especially for food and energy supplies, ensure that the consumer sentiment is currently not making any progress.’
In the US on Monday, Wall Street ended higher, with the Dow Jones Industrial Average and the S&P 500 both up 0.6%, and the Nasdaq Composite up 0.8%.
It will be a data-heavy week in the US, with a gross domestic product reading on Wednesday, the Fed’s preferred inflationary gauge on Thursday and the latest jobs report on Friday.
Gold was quoted at $1,922.71 an ounce early Tuesday, higher than $1,906.88 on Friday. Brent oil was trading at $83.73 a barrel early Tuesday, higher than $83.57 late Friday.
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