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(Alliance News) - Gains for travel stocks, oil majors and online grocer Ocado helped the FTSE 100 edge into the green in early trade on Tuesday.
The FTSE 100 index was up just 1.29 points at 7,166.20. The mid-cap FTSE 250 index was down 6.88 points at 23,015.52. The AIM All-Share index was down 0.1% at 1,263.54.
The Cboe UK 100 index was up 0.1% at 713.49. The Cboe 250 was flat at 20,713.96, and the Cboe Small Companies flat at 15,590.67.
In mainland Europe, the CAC 40 in Paris and the DAX 30 in Frankfurt were both down 0.2%.
The mixed start in Europe followed a downbeat Asian session.
The Japanese Nikkei 225 index ended up 0.2%, but in China, the Shanghai Composite closed down 0.1%, while the Hang Seng index in Hong Kong was down 0.1% in late trade. The S&P/ASX 200 in Sydney finished 0.7% lower.
At the bottom of London's FTSE 100 were property developers British Land and Land Securities, down 3.9% and 2.6% respectively after Jefferies cut both the stock to Hold from Buy.
Wealth manager St James's Place also suffered from a ratings downgrade, cut to Neutral from Buy at Bank of America.
However, topping the index was Ocado, rising 2.6% as the online grocer unveiled a slimmed half-year loss and partnership with Auchan Retail to develop Alcampo's online business in Spain.
Auchan Retail, which has operations across 13 countries, operates the Alcampo brand in Spain via a network of 310 stores with revenue totalling EUR4.5 billion in 2020. There has been a significant acceleration in online grocery shopping during the pandemic, Ocado said, and the partnership will allow Alcampo meet growing demand for competitively priced, high-quality grocery e-commerce.
Ocado and Alcampo will initially build a customer fulfilment centre to serve the Madrid region from 2024, with additional automated warehouses to be announced at future dates. The fee structure with Alcampo is similar to that agreed with other international Ocado Solutions partners.
Ocado and Auchan Retail will explore the potential to extend their partnership into other geographies.
"The appetite for our unique end-to-end platform remains strong as retailers look to take advantage of the channel shift which is now redrawing the landscape of the global grocery market," said Chief Executive Tim Steiner.
Separately, Ocado said revenue for the half-year to May 30 was GBP1.32 billion, up 21% from GBP1.09 billion a year ago, while the online grocer's pretax loss slimmed to GBP23.6 million from GBP40.6 million.
Sales growth in the period was driven by strong demand for Ocado Retail - its joint venture with Marks & Spencer - and the increased popularity of online grocery shopping in response to Covid-19. M&S shares were down 0.1%.
Oil majors gained as energy prices continued their steady climb higher, bolstered by a stand-off amongst members of the OPEC+ group of oil producing nations. Royal Dutch Shell 'A' shares and 'B' shares both advanced 1.0%, while peer BP rose 0.7%.
Brent oil was quoted at USD77.41 a barrel early Tuesday, rising from USD76.94 late Monday and continuing to trade around its best levels since late 2018.
The 23 members of the OPEC+ group of oil producers cancelled a meeting scheduled for Monday that was supposed to overcome an impasse over crude output levels.
The meeting "has been called off", an OPEC statement said, quoting Secretary General Mohammed Barkindo.
At stake is a proposal that would see the world's leading oil producers raise output by 400,000 barrels per day each month from August to December. But that plan risks being delayed or even failing over a further proposal to extend a deadline on capping output to the end of 2022. Holding out against the new deal is the United Arab Emirates.
Precious metals miners were another group in the green as gold prices strengthened on dollar weakness. Fresnillo rose 0.8% and Polymetal International was up 0.7%. Gold was quoted at USD1,804.50 an ounce early Tuesday, up from USD1,791.50 on Monday.
Travel firms got a tailwind after UK Prime Minister Boris Johnson on Monday promised to tear up England's coronavirus regulations at the next stage of the road map.
British Airways-parent International Consolidated Airlines rose 1.6%, while easyJet gained 1.8% in the FTSE 250.
Johnson has gambled on trusting the public's judgment and the protection offered by vaccines as he scrapped mandatory mask-wearing and lifted social distancing requirements. The so-called "freedom day" is expected on July 19, with a decision on whether or not to go ahead being taken a week earlier.
Under Step 4 of the easing road map, there will be no limits on social contact, meaning the end of the orders such as the "rule of six" and restrictions on guests at weddings and mourners at funerals. All remaining businesses will be able to reopen, including nightclubs, while capacity caps will be lifted and bars and restaurants will no longer be restricted to table service.
Later this week, Transport Secretary Grant Shapps will give an update on plans to remove the need for fully vaccinated arrivals from amber list countries to isolate.
Meanwhile, Germany's health agency said on Monday five so-called virus variant countries would be reclassified as "high incidence areas", lifting a ban on entry for travellers from those nations who are not German residents or citizens.
The Robert Koch Institute said India, Nepal, Russia, Portugal and the UK would be reclassified from Wednesday, meaning any traveller will be able to enter as long as they observe quarantine and testing rules.
Sterling was quoted at USD1.3886, up from USD1.3851 at the London equities close on Monday. The euro traded at USD1.1887 early Tuesday, higher than USD1.1865 late Monday.
German new manufacturing orders fell surprisingly month-to-month in May, massively undershooting market expectations, numbers showed.
According to Destatis, new orders in manufacturing were 3.7% lower monthly in May, having risen 1.2% in April. According to consensus cited by FXStreet, a chunky 5% rise in new orders was expected in May, so the figure strikingly missed market forecasts.
Against the yen, the dollar was quoted at JPY110.89, up on JPY110.84.
In the economic calendar on Tuesday, there is a UK construction PMI reading at 0930 BST, and eurozone retail sales at 1000 BST. In the afternoon, there are US IHS Markit services PMI at 1445 BST and ISM services PMI at 1500 BST.
By Lucy Heming; lucyheming@alliancenews.com
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