London stocks closed in the green for the fourth consecutive day on Tuesday, as investors remain hopeful for a potential trade deal with the US and the pound rises amid a slow-down in wage growth.
The FTSE 100 index rose 114.78 points, 1.4%, at 8,249.12. The FTSE 250 jumped 277.52 points, 1.5%, at 19,256.03, and the AIM All-Share advanced 6.99 points, 1.1%, at 666.01.
The Cboe UK 100 rose 1.5% at 821.34, the Cboe UK 250 firmed 2.0% at 16,820.02, and the Cboe Small Companies advanced 1.5% at 15,143.12.
In Paris, the CAC 40 gained 0.9%, while Frankfurt’s DAX 40 climbed 1.4%.
Amid the ongoing tariff uncertainty, US Vice President JD Vance said the US is ‘working very hard’ with the UK on negotiating a ‘great’ trade deal.
‘We’re certainly working very hard with Starmer’s government’ on a trade deal, Vance said, adding that there’s a ‘good chance that, yes, we’ll come to a great agreement that’s in the best interest of both countries’.
Business and trade minister Sarah Jones welcomed Vance’s comments but declined to comment on the progress of negotiations.
She told LBC: ‘We know we’re in a good position,’ adding that ‘we are having good conversations.’
But trade tensions between China and the US remained on show, with Bloomberg reporting that the Chinese government has ordered the country’s airlines to not take any further deliveries of jets made by the US’s Boeing.
Beijing also has told Chinese airlines to halt all purchases of aircraft equipment and parts from US companies, the financial news agency said.
Boeing shares fell 1.2% in early trading in New York, although well received banking results from Bank of America, up 4.2%, and Citigroup, up 2.7%, saw Wall Street’s recovery continue.
At the time of the London equity close, the Dow Jones Industrial Average traded 0.3% higher, the S&P 500 was up 0.4%, as was the Nasdaq Composite.
Deutsche Bank noted while overall uncertainty has ‘rarely been higher’, the US bond market and the dollar will be the ‘ultimate scorecard’ that will decide the end game for this tariff policy.
‘If both continue to weaken, the pressure will mount on the US administration to reverse a large degree of their recent actions. However, if things stabilise, their desire for huge change will keep them on an aggressive path.’
On Tuesday, the dollar was mixed, fading against sterling and the yen, but recouping some lost ground against the euro.
The pound was quoted higher at $1.3229 late on Tuesday in London, compared to $1.3183 at the equities close on Monday. Against the yen, the dollar was trading lower at JP¥143.01 compared to JP¥143.21.
The euro stood lower at $1.1303 against $1.1375.
Economic data provided further support in London with figures showing wages grew at a slightly slower pace than expected, while retail sales rose.
Annual growth in regular pay, which excludes bonuses, was 5.9% in the three months to February, unchanged from the prior period, according to the Office for National Statistics.
Total pay, including bonuses, grew 5.6%, slightly down from 5.8% in the previous quarter, and below the 5.7% consensus.
Meanwhile, the UK unemployment rate held steady in the three months to February, at 4.4%, unchanged from the previous three-month period.
Kallum Pickering at Peel Hunt thinks while headline wage growth is ahead of the longer run sustainable rate it should not prevent the Bank of England from continuing to gradually remove monetary tightening over the coming quarters amid weaker confidence and likely rising unemployment.
In further welcome news, a report showed that the warmer weather helped drive a modest improvement in UK retail sales during March.
According to the BRC-KPMG retail sales monitor, UK total retail sales increased by 1.1% year-on-year in March, against growth of 3.5% a year ago. Last year’s figure was boosted by the timing of Easter, which fell in March 2024.
Linda Ellett, UK head of Consumer, Retail & Leisure at KPMG, said: ‘Amidst downbeat consumer confidence in the UK’s economic outlook, and many households facing rising costs, retail sales growth feels an achievement.’
The news helped push retailers higher, along with positive broker commentary.
Next rose 2.0% as Goldman Sachs upgraded to ’buy’ from ’neutral’, while JD Sports Fashion rose 2.0%, as Barclays upgraded to ’equal weight’ from ’underweight’.
3i led the blue-chip gainers, up 4.6%, as Citi reiterated a ’buy’ rating and raised its share price target to 4,850p from 4,670p.
On the FTSE 250, Tate & Lyle rose 6.2% as it reported the integration of CP Kelco Ltd is progressing smoothly and said 2025 financial year results, as well as its fourth-quarter results, are expected to be in line with existing guidance.
In June 2024, Tate bought pectin and gums business CP Kelco for $1.8 billion.
‘We are confident in delivering the targeted run-rate cost synergies of $50 million by the end of the 2027 financial year, and for more than 50% of these to be delivered by the end of the 2026 financial year,’ the firm added.
DiscoverIE, up 5.1%, benefited from an upgrade by RBC Capital Markets to ’outperform’, while B&M European Retail firmed 4.7% after an upbeat trading statement.
Elsewhere, De La Rue jumped 15% after accepting a £263 million bid from US private equity firm, Atlas Holdings.
The Basingstoke-based firm, which prints banknotes for the Bank of England and other central banks across the world, said the cash offer from Atlas is worth 130 pence per share.
De La Rue Chief Executive Clive Vacher said on Tuesday: ‘Atlas is the right partner to take De La Rue into its next phase of growth. Most importantly, under Atlas’s ownership we can ensure long-term stability for our customers and our people, and best position the business for its next chapter.’
The firm said it had ‘carefully reviewed’ a number of other proposals with its advisers and ‘unanimously concluded’ that the Atlas acquisition achieves the ‘critical objective of delivering an outcome that satisfactorily address the interests of all stakeholders’.
Brent oil was quoted lower late in London on Tuesday, at $64.39 a barrel from $64.83 late Monday. Gold was quoted higher at $3,223.88 an ounce against $3,207.11.
Wednesday’s global economic calendar sees a slew of data in China overnight, UK inflation figures plus US retail sales and industrial production data.
The local corporate calendar on Wednesday has trading statements from miners Rio Tinto and Antofagasta and housebuilder Barratt Redrow. WH Smith reports half-year results.
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