FTSE 100 steadily recovers during quiet trading day in Europe
London’s benchmark index rose 0.3% on Tuesday.
London’s blue chip index extended its recovery following losses last week, thanks to a relatively quiet day across European markets.
The FTSE 100 rose 0.3% or 21.97 points to 7,275.25 on Tuesday, as it continued to gain strength after suffering on the back of a stronger pound last week.
Many of the index’s multinational components tend to benefit when foreign currencies are stronger.
David Madden, a market analyst at CMC Markets UK, warned that while the FTSE 100 was bouncing back, it could struggle to climb much further.
“Last week the British market crashed through the significant 7300 region, and if that mark isn’t re-taken, the wider bearish outlook could remain.”
His warning comes during a relatively quiet trading day for European markets, with many investors looking ahead to Prime Minister Theresa May’s highly anticipated Brexit speech in Italy on Friday.
Sterling was trading relatively flat against major currencies, up 0.1% versus the US dollar at 1.351 and down 0.05% against the euro at 1.128.
Across Europe, the French Cac 40 rose 0.16% while the German Dax was flat.
Mr Madden said: “European stock markets are experiencing low volatility today, and trading ranges are small.
“Dealers don’t have a whole lot to go on news-wise as there hasn’t been any major change to the economic or political outlook.”
Brent crude prices were down around 0.6% at $55.02 per barrel after commodity information firm S&P Global Platts forecast a rise in US crude inventories, ahead of key data set to be released by the Energy Information Agency (EIA) on Wednesday.
UK grocers were among the top performers on the FTSE 100, after Kantar Worldpanel data recorded a 3.6% jump in supermarket sales for the 12 weeks to September 10, marking the sixth consecutive month of growth over 3%, driven largely by grocery inflation.
It sent Marks and Spencer higher by 11.4p to 340p, J Sainsbury up 6.1p to 243.1p, and WM Morrison Supermarkets up 4.6p to 235.7p.
Speedy Hire rose 0.5p to 51.75p as the company upped its outlook for annual profits which are now expected to come in “well ahead” of last year, following a cost-cutting drive.
It said efforts to drive down the number of operating divisions and distribution centres would deliver overhead savings of £3 million a year.
French Connection dropped 1p to 43.5p after reporting a pre-tax loss of £5.7 million for the six months to July 31, and a 1.6% drop in group revenue to £68.1 million.
The retailer tried to assure investors that it had made “significant steps” towards a return to profit amid difficult trading conditions across its key markets.
Ocado shares fell 5.9p to 296.1p as the group signalled that costs linked to the set-up of new distribution centres could knock earnings.
It overshadowed news of a 13.1% rise in third-quarter retail revenues to £312.7 million.
The biggest risers on the FTSE 100 were Marks and Spencer up 11.4p to 340p, International Consolidated Airlines Group up 15.5p to 606.5p, J Sainsbury up 6.1p to 243.1p, and Johnson Matthey up 66p to 2,976p.
The biggest fallers on the FTSE 100 were Tui AG down 29p to 1,287p, Carnival down 78p to 4,760p, Antofagasta down 13.5p to 940p, and Coca-Cola HBC down 36p to 2,540p.