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(Alliance News) -Â London stocks opened in the green on Tuesday, nudging up ahead of this week's monetary policy decision from the US Federal Reserve.
The pound was subdued despite data showing an improvement in the UK labour market, as Prime Minister Boris Johnson delayed England's full lockdown easing to July.
"Jobs are heading in the right direction, but after the roadmap to reopening has been delayed for four weeks, we can't rule out a dangerous detour as we head into the summer," said Sarah Coles, personal finance analyst at Hargreaves Lansdown.
The FTSE 100 index was up 31.37 points, or 0.4%, at 7,178.05 early Tuesday. The mid-cap FTSE 250 index was up 60.57 points, or 0.3%, at 22,805.08. The AIM All-Share index was down 0.1% at 1,249.84.
The Cboe UK 100 index was up 0.3% at 715.16. The Cboe 250 was up 0.1% at 20,496.72, and the Cboe Small Companies up 0.1% at 15,214.19.
In mainland Europe, the CAC 40 in Paris was up 0.4%, while the DAX 30 in Frankfurt was even more positive, up 0.7% early Tuesday.
While European stocks started Tuesday's session on the front foot, Naeem Aslam at AvaTrade said traders are "playing it safe" ahead of the latest US interest rate decision.
The US Federal Reserve's two-day meeting begins on Tuesday, with the latest interest rate decision due on Wednesday. The central bank will be mulling last week's US inflation print, which accelerated to its fastest pace since 2008.
"Stock traders should keep in mind that last week the US reported higher inflation figures exceeding projections. Despite this, Treasury yields dropped significantly and stock markets boomed, depicting that investors believe in the Fed's narrative that inflationary pressures are short-term and are likely to eventually subside," said Aslam.
Equity trade was mixed in Asia overnight. In China, the Shanghai Composite ended down 0.9%, while the Hang Seng index in Hong Kong was down 0.6% in late trade.
Operators of a nuclear power plant in southern China are fixing a "performance issue" at the facility, but the gas emissions carried out to do that are within acceptable limits, its French part-owner said Monday following a US media report of a potential leak.
CNN said the US government has spent the past week assessing a report of a leak at the Taishan Nuclear Power Plant in populous Guangdong province after Framatome, a French firm that partly owns it, warned of an "imminent radiological threat". But one of the unnamed US officials cited by CNN said the administration of President Joe Biden believes the facility is not yet at "crisis level".
Meanwhile, in Tokyo on Tuesday, the Nikkei 225 index closed up 1.0%. The S&P/ASX 200 in Sydney ended up 0.9%.
Against the yen, the dollar rose to JPY110.05 versus JPY109.99 as Japan's opposition submitted a no-confidence motion against Prime Minister Yoshihide Suga's cabinet. However, Suga's Liberal Democratic Party and its smaller coalition partner Komeito have a majority in the lower house of parliament and are expected to shoot the vote down on Tuesday.
Gold was quoted at USD1,867.00 an ounce early Tuesday, up from USD1,863.20 on Monday. Brent oil was trading at USD73.23 a barrel, soft on USD73.28 late Monday.
The euro traded at USD1.2140, a touch higher from USD1.2124 late Monday.
Sterling was quoted at USD1.4106 early Tuesday, soft on USD1.4112 at the London equities close on Monday, despite data showing the UK unemployment rate edged down.
The unemployment rate for the three months to April was 4.7%, down from 4.8% for the three months to March.
This labour market recovery appears to have extended into May. The number of payrolled employees has increased for the sixth consecutive month, the ONS said, up by 197,000 in May to 28.5 million.
However, the data comes as UK Prime Minister Boris Johnson has been forced to delay the end of England's coronavirus restrictions by up to four weeks after being warned that ending curbs could lead to thousands of deaths and unbearable pressure on the NHS.
Johnson announced the setback to the final phase of his plan to end the lockdown on Monday, citing concerns over the rapidly spreading Delta variant first identified in India.
Experts feared going ahead with step four on June 21 as planned could lead to hospital admissions on the scale of the first wave of Covid-19 heaping unsustainable pressure on the health service. To avert this, Johnson said during a Downing Street press conference that the end of all legal limits on social contact would be put back to July 19.
ING commented: "Things are looking up in the UK jobs market, though the remaining months of 2021 are likely to be turbulent. Unemployment is likely to rise again as wage support ends, though assuming the four-week delay to ending restrictions isn't extended further, the spike is likely to be more muted than it might have been had furlough ended earlier."
And in some positive news on the vaccine front, AstraZeneca noted data from Public Health England showing its Covid-19 jab offers good protection against the Delta variant.
Real world data from PHE, published as a pre-print, showed two doses of Astra's jab is 92% effective against hospitalisation from the Delta variant and showed no deaths among those vaccinated.
Astra on Tuesday also reported a trial studying its long-acting antibody combination to treat those recently exposed to the SARS-CoV-2 virus did not meet its primary endpoint. The primary endpoint was post-exposure prevention of symptomatic Covid-19 with AZD7442 compared to placebo.
The 1,212 trial participants were unvaccinated adults with confirmed exposure to a person with a case of the SARS-CoV-2 virus within the past eight days. AZD7442 reduced the risk of developing symptomatic Covid-19 by a third compared to placebo, which was not statistically significant.
"While this trial did not meet the primary endpoint against symptomatic illness, we are encouraged by the protection seen in the PCR negative participants following treatment with AZD7442. We await results from Provent, our pre-exposure prevention trial and Tackle, our treatment trial in preventing more severe disease, to understand the potential role of AZD7442 in protecting against Covid-19," said Mene Pangalos, executive vice president for BioPharmaceuticals R&D at Astra.
Astra shares were up 0.6% early Tuesday.
At the bottom of the FTSE 100 in early trade was Anglo American, down 1.2% as RBC cut the miner to Sector Perform from Outperform.
Just Eat Takeaway.com rose 2.3%, the second best blue-chip performer, after completing its acquisition of Grubhub.
"I have always believed that the combination of Takeaway.com, Just Eat and Grubhub is a winning combination. The new company is the market leader in Europe, Canada and Australia, with very strong positions in the most important markets in the United States," said Jitse Groen, chief executive & founder of Just Eat Takeaway.com.
FTSE 250-listed PageGroup fell 2.6% after Morgan Stanley cut the recruitment firm to Underweight from Equal Weight.
The economics events calendar on Tuesday has the eurozone trade balance at 1000 BST. In the afternoon, there are the US producer price index and retail sales data at 1330 BST and industrial production at 1415 BST.
By Lucy Heming;Â lucyheming@alliancenews.com
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