FTSE 100 has best day since November 2022

(Alliance News) - Global equities bounced on Tuesday as risk appetite returned to the market, despite hostilities in the Middle East continuing, as dovish words from Federal Reserve officials restored investor confidence.

Stimulus hopes from China also lifted the mood, with mining shares among the beneficiaries.

The FTSE 100 index surged 136.00 points, or 1.8%, at 7,628.21. The FTSE 250 jumped 395.61 points, or 2.3%, at 17,967.67, and the AIM All-Share rose 10.26 points, or 1.5%, at 698.09.

By points, it was the FTSE 100's largest advance since early-November 2022. It was the FTSE 250's best day since July.

The Cboe UK 100 jumped 1.9% to 762.32, the Cboe UK 250 surged 2.5% to 15,645.73, and the Cboe Small Companies added 0.7% at 13,065.13.

In European equities on Tuesday, the CAC 40 in Paris and the DAX 40 in Frankfurt both jumped 2.0%.

Stocks in New York were higher. The Dow Jones Industrial Average was up 0.7%, the S&P 500 index rose 1.0%, and the Nasdaq Composite surged 1.2%.

Helping some confidence return to markets, US bond yields plunged on Tuesday.

The US bond market had been closed on Monday for Columbus Day. Bond yields plunged when that market re-opened, with the 10-year Treasury yield narrowing markedly to 4.64% around Tuesday afternoon UK time, from 4.80% late Friday.

The US Federal Reserve should proceed carefully when deciding whether or not to hike interest rates further to bring down inflation, two senior officials said Monday.

The Fed's rate-setting committee "is in a position to proceed carefully in assessing the extent of any additional policy firming that may be necessary," Fed Vice Chair Philip Jefferson said in prepared remarks.

Dallas Fed President Lorie Logan said she would "carefully" evaluate economic and financial developments when deciding if to back another rate hike.

The pound was quoted at USD1.2270 at the time of the London equities close, up from USD1.2213 on Monday. The euro stood at USD1.0606, higher against USD1.0548. Against the yen, the dollar was trading at JPY148.74, higher compared to JPY148.59.

"The British pound stabilized after recovering from its lowest levels in six months, as market sentiment improved and Catherine Mann, a Bank of England official, called for a more hawkish approach to reduce inflation to 2%. Last week, Bank of England Governor Andrew Bailey said he expects inflation to drop to below 5% by the end of the year but added that he cannot promise price stability promptly," XS.com analyst Rania Gule commented.

In London, Anglo American added 5.6% and Antofagasta rose 4.5% as miners were lifted by some promising news out of China.

Bloomberg on Tuesday reported that China is mulling lifting its budget deficit, paving the way for a new round of stimulus.

Policymakers are considering USD137 billion worth of additional sovereign debt issues for infrastructure spending, Bloomberg reported.

Elsewhere in London, stocks which sold off after events in Gaza, were on the up on Tuesday. Energean, a hydrocarbon company developing a substantial gas field in offshore Israel, rose 9.2%.

Travel stocks also rose, after a difficult start to the week. Tui added 6.6%, while easyJet climbed 4.0%.

Greencore jumped 22%. It expects its adjusted operating profit in the year ended September 29 will be ahead of current market expectations of GBP70.1 million.

It predicts its full-year adjusted operating profit will be in the range of GBP74 million to GBP76 million, thanks to a "strong" second-half in what it described as a "difficult seasonal comparative period."

The convenience food manufacturer also announced its intention to restart its share buyback programme as part of a GBP50 million return of capital to shareholders announced in May 2022.

AIM-listed YouGov surged 16% as it posted a surge in annual profit and remained confident about its prospect in its current financial year and beyond.

The research and data analytics firm reported a pretax profit of GBP44.7 million in the year ended July 31, jumping 77% from GBP25.3 million the year prior.

Revenue totalled GBP258.3 million, up 17% from GBP221.1 million despite a "challenging" macroeconomic backdrop. YouGov also noted that its annual revenue performance was "well ahead" of the wider industry.

At the other end of London's junior market, Calnex, a provider of test and measurement solutions for the global telecommunications sector, slumped 30%.

It said order inflow in the first six months of its financial year has "remained at the subdued levels".

"The cautiously improving outlook for the sector identified earlier this year has not developed momentum and the company is aware that certain customers have elected to delay projects and associated orders in response to continuing wider economic uncertainty. These factors have led the board to conclude that H2 FY24 will be slower than anticipated," Calnex cautioned.

Revenue for the year ending March 31 is expected to be 20%-30% below current market expectations, depending on order timing.

Brent oil was quoted at USD87.50 a barrel late Tuesday afternoon in London, down from USD87.94 at the London equities close on Monday. Gold was quoted at USD1,859.73 an ounce, higher against USD1,852.16.

Wednesday's economic calendar has a US producer price index reading at 1330 BST.

The local corporate calendar has trading statements from pub firm Marston's and electronics manufacturer discoverIE.

By Eric Cunha, Alliance News news editor

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