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(Alliance News) - Start-of-week optimism continued into Tuesday's session, with oil prices back above the USD70 mark and the mid-cap FTSE 250 index hitting fresh record levels.
The FTSE 100 index closed up 16.76 points, or 0.2%, at 7,125.78.
The FTSE 250 rallied 145.52 points, or 0.6%, to 23,886.01 - having hit a fresh all-time high of 23,888.16 during Tuesday's session - and the AIM All-Share closed up 6.41 points, or 0.5%, at 1,272.38.
The Cboe UK 100 ended flat at 707.85, the Cboe UK 250 closed up 0.5% at 21,721.19, and the Cboe Small Companies ended up 0.2% at 15,462.12.
"The FTSE 250 has managed to outperform, making another new record high, however the FTSE 100 has lagged, along with the rest of Europe's stock markets, with the exception of the DAX," commented Michael Hewson, chief market analyst at CMC Markets.
Germany's flagship stock index got a boost after an upwards revision to the country's second quarter growth figures.
Gross domestic product rose by 1.6% in the three months to June 30 compared with the three months to March 31, after adjustment for price, seasonal and calendar variations. GDP climbed 9.4% on the year, according to the country's final reading.
Flash estimates at the end of July had shown German GDP growth of 1.5% quarter-on-quarter in the three months to June. Annually, growth had been estimated at 9.2% on a seasonally-adjusted basis.
In European equities on Tuesday, the CAC 40 in Paris ended down 0.3%, while the DAX 30 in Frankfurt ended up 0.3%.
The euro stood at USD1.1747 at the European equities close Tuesday, up against USD1.1734 at the same time on Monday.
Helping lead the charge in the mid-cap FTSE 250 index was oil and gas company Habour Energy, up 6.7%. The firm bounced as oil prices continued their upwards march, with Brent trading around its best levels for a week-and-a-half.
The North Sea benchmark was quoted at USD70.73 a barrel at the London equities close Tuesday, up from USD68.44 late Monday.
Craig Erlam, senior market analyst at Oanda, said: "Oil prices are making gains once more after a fantastic start to the week...as China reported no new Covid cases. Prices have been crushed in recent weeks as a result of the uncertain growth outlook for the worlds largest crude importer so Monday's news was naturally very bullish."
Shares in oil major BP rallied 1.3% while peer Royal Dutch Shell saw more moderate gains, 'A' and 'B' shares both ending up 0.9%.
An increase in oil prices was unable to stop airlines ascending on Tuesday, with British Airways parent International Consolidated Airlines rising 2.7%, mid-cap easyJet up 5.3% and Irish budget carrier Ryanair up 2.5%.
Monday's news that the US Food & Drug Administration has fully approved the Pfizer-BioNTech Covid vaccine provided travel firms with some optimism.
Approval comes as the ultra-contagious Delta variant pummels the US, with around 80,000 Americans hospitalized with Covid and more than 700 dying every day. The hardest hit regions include southern states Florida, Alabama, Mississippi and Louisiana.
The decision to fully approve it among people aged 16 and up was based on updated data from the drug's clinical trial involving more than 40,000 people, which found the vaccine 91% effective in preventing Covid.
Weighing on the FTSE 100 was J Sainsbury, falling 4.9% as it gave back some of Monday's 15% jump on M&A speculation. Shares surged on Monday following a report from the Sunday Times saying it could be the next UK grocer to be subject of bid interest from the private equity space.
Stocks in New York were muted at the London equities close, with the DJIA up 0.1%, the S&P 500 index up 0.1%, and the Nasdaq Composite up 0.3%.
Traders continue to look ahead to US Federal Reserve Chair Jerome Powell's Friday appearance at the annual Jackson Hole central banking symposium.
"Stock markets may get another helping hand from Jerome Powell this week when he appears at the annual Jackson Hole event. Until recently, this looked the perfect platform to lay the groundwork for a September taper announcement but some concerning economic releases and a surge in delta cases in the US may see the Fed adopt a more cautious stance for now," said Oanda's Erlam.
The dollar continued to soften ahead of Powell's speech.
The pound was quoted at USD1.3721 at the London equities close Tuesday, firm compared to USD1.3717 at the close on Monday. Against the yen, the dollar was trading at JPY109.67, down compared to JPY109.78 late Monday.
Precious metal gold climbed further above the USD1,800 mark as the greenback eased. Gold was quoted at USD1,806.44 an ounce at the London equities close Tuesday against USD1,804.37 at the close on Monday.
The economic calendar for Wednesday has the Ifo's German business climate monitor at 0900 BST and US durable goods orders at 1330 BST.
Wednesday's UK corporate calendar has half-year results from Grafton Group and Costain Group, while Clipper Logistics puts out full-year results.
By Lucy Heming; lucyheming@alliancenews.com
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