(Alliance News) - Stocks in London edged marginally lower Tuesday, underperforming European peers, as sterling pushed higher after new UK Prime Minister Rishi Sunak promised to steer Britain back towards financial stability.

"Sunak's appearance at Downing Street had a tangible effect on the pound today, which currently stands as the best performing of the major currencies over the past 24 hours. Unfortunately for the FTSE 100, its inverse correlation with the pound means that it stands as the one market in the red," said Joshua Mahony at IG.

The FTSE 100 index closed down 0.51 of a point at 7,013.48 on Tuesday. The FTSE 250 ended up 494.08 points, or 2.9%, at 17,831.63. The AIM All-Share closed up 11.89 points, or 1.5%, at 799.44.

The Cboe UK 100 ended down 0.1% at 700.90, the Cboe UK 250 closed up 2.8% at 15,222.68, and the Cboe Small Companies ended up 0.2% at 12,269.51.

Sunak pledged to fix the "mistakes" of Liz Truss's leadership as he made his first speech as PM.

In his speech from Downing Street, Sunak said Truss was "not wrong" to want to drive up growth but added that "some mistakes were made."

He vowed to place "economic stability and confidence at the heart of this government's agenda", after the financial chaos triggered by Truss.

The pound was quoted at USD1.1464 at the London equities close Tuesday, up sharply from USD1.1295 at the close on Monday.

Kit Juckes, analyst at Societe Generale, warned, however, that with the UK economy "surely already in recession and set to suffer from tighter fiscal policy", sterling is "unlikely to enjoy much more of a relief bounce."

In the FTSE 100, Segro finished 2.1% higher on Tuesday as UBS raised the British property investor and developer to 'buy' from 'neutral'.

At the bottom of the blue-chip index was HSBC, falling 4.2% as it reported a decline in profit and revenue in the third quarter of 2022.

In the three months to September 30, HSBC reported pretax profit of USD3.15 billion, down 42% from USD5.40 billion a year before. Revenue decreased by 3.2% to USD11.62 billion from USD12.01 billion.

HSBC explained that its third quarter results included a USD2.4 billion impairment, following the reclassification of its retail banking operations in France to held-for-sale, as well as a net charge for expected credit losses and other credit impairment charges.

Whitbread fell 0.8% despite swinging to an interim profit and return to dividends as the hotel sector recovered from Covid-19.

In the first half ended September 1, the Bedfordshire-based owner of the Premier Inn chain said revenue more than doubled year-on-year to GBP1.35 billion from GBP661.6 million.

Whitbread swung to a pretax profit of GBP307.4 million, compared to a loss of GBP19.3 million a year before. Compared to the same period of financial 2020, pretax profit was 40% higher than GBP219.9 million.

"The strong recovery in UK accommodation sales continued during the first half, and while Food & Beverage sales remained challenging and 5% behind pre-pandemic levels," Whitbread said.

In the FTSE 250, Urban Logistics added 1.5%, but was up over 10% earlier in the day.

The UK logistics real estate investor said trading in its first half was strong, as demand strengthened and vacancies fell.

"Lettings have been strong across the portfolio, as we see a robust occupational market with high demand and low vacancies. In particular, we're very pleased that our new development at Blenheim Park has let so quickly, with the final unit expected to be let shortly, and providing an expected 6.6% yield on cost across the project," said Chief Executive Richard Moffitt.

Elsewhere in London, Made.com plunged 93% as it said talks with possible suitors fell through, with the sofa seller now edging precariously closer to collapse.

"Following further discussion, those parties have all now confirmed to the company that they are unable to meet the necessary timetable. As a result, those discussions have been terminated and the company is no longer in receipt of funding proposals or possible offers for the issued and to be issued share capital of the company," Made said.

Made.com is also mulling whether a suspension of trading of its shares is "appropriate".

In European equities on Tuesday, the CAC 40 in Paris ended up 1.9%, while the DAX 40 in Frankfurt ended 0.9% higher.

The euro stood at USD0.9963 at the European equities close Tuesday, higher against USD0.9877 at the same time on Monday.

Against the yen, the dollar was trading at JPY147.77 late Tuesday, lower compared to JPY148.82 late Monday.

Stocks in New York were firmly in the green at the London equities close, with the Dow Jones Industrial Average up 0.9%, the S&P 500 index up 1.3%, and the Nasdaq Composite up 2.0%.

US equities received a boost from well-received updates from the likes of soft drinks maker Coca-Cola and courier UPS, with both firms posting rises in third quarter revenue and net income.

Coca-Cola shares were 1.3% higher, UPS was up 1.9%.

Brent oil was quoted at USD91.91 a barrel at the London equities close Tuesday, up from USD90.88 late Monday.

Gold was quoted at USD1,655.96 an ounce at the London equities close Tuesday, sharply higher against USD1,648.76 at the close on Monday.

In Wednesday's UK corporate calendar, Barclays will publish its third-quarter results and Bloomsbury Publishing posts its half-year results.

In the economic calendar, there's a services PPI reading from Japan overnight before the Bank of Canada make an interest rate decision at 1500 BST.

By Heather Rydings; heatherrydings@alliancenews.com

Copyright 2022 Alliance News Limited. All Rights Reserved.