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(Alliance News) - Markets in Europe overcame a lethargic morning for returning New York equities on Tuesday, with the mood in London supported by hopes of a package by the new UK prime minister to keep a lid on rampant energy bills.
The FTSE 100 index ended up 13.01 points, 0.2%, at 7,300.44 on Tuesday.
It was a somewhat choppy afternoon for London's blue-chip benchmark, however. It suffered a slight sell-off and fell into the red after a dour open in New York, but perked up in the final hour of trading.
The mid-cap FTSE 250 index rose 191.16 points, or 1.0%, at 18,820.84. The AIM All-Share index added 4.24 points, or 0.5%, at 865.38.
The Cboe UK 100 index closed 0.2% higher at 729.20. The Cboe 250 jumped 1.2% to 16,220.78, and the Cboe Small Companies ended down 0.2% at 136,49.91.
In mainland Europe, the CAC 40 in Paris ended up 0.2%, while the DAX 40 in Frankfurt climbed 0.9%.
Markets in New York re-opened after Labor Day. The Dow Jones Industrial Average and S&P 500 were marginally lower, while the Nasdaq Composite was down 0.3%.
Stocks in New York made a slow start, after a pair of conflicting readings of the services sector.
The S&P Global services purchasing managers' index fell to a reading of 43.7 points for August, down markedly from 47.3 points in July. The figure was lower than the flash estimate of 44.1.
The PMI falling further below the 50-point no change mark indicates the sector's contraction picked up speed in August. The decline was the steepest fall in activity since May 2020.
However, the Institute for Supply Chain Management released its own PMI survey, which contended that economic activity in the services sector grew for the 27th consecutive month.
The ISM services PMI registered 56.9 for August, which edged slightly higher than 56.7 in July.
The figure was higher than FXStreet-cited consensus of growth slowing to 55.1.
"The latest ISM services report for August raised the expectation of another 75bps rate move by the Federal Reserve in just over a fortnight's time," CMC Markets analyst Michael Hewson commented.
The dollar was largely stronger on Tuesday, hitting a 24-year high against the yen. The greenback jumped to JPY142.90 at the time of the London equities close on Tuesday, from JPY140.53 at the same time on Monday.
The euro faded to USD0.9910 late Tuesday, from USD0.9919 late Monday. Sterling was quoted at USD1.1531, up from USD1.1507 a day earlier, but down from an intraday high of USD1.1608.
"The pound has outperformed many of its peers today, with Liz Truss delivering a much-anticipated shock and awe announcement aimed at bringing energy prices under control," IG analyst Joshua Mahony commented.
Sterling got a lift on the day Liz Truss received the keys to Number 10. Truss will enter Downing Street after her triumph in the Tory leadership contest as she prepares to roll out an emergency support package to deal with the energy crisis.
The Daily Telegraph reported that among the measures under consideration was a scheme – costing tens of billions of pounds – to freeze bills until the next general election in 2024.
The prospect of an easing of pressure on the consumer lifted retail and leisure stocks. Athleisure firm JD Sports rose 3.5%, pub owner JD Wetherspoon added 3.5% and sofa seller Made.com added 2.4%.
Blue-chip housebuilders were also on the up, following a well-received update from Berkeley Group.
Berkeley said trading in the first four months of its new financial year was ahead of financial 2022. It is on track to meet annual profit guidance, guiding for financial 2023 pretax profit of GBP600 million and GBP625 million for financial 2024. In financial 2022, it recorded pretax profit of GBP551.5 million.
Berkeley shares rose 3.7%, while Taylor Wimpey climbed 3.8%.
It was a largely positive day for the London-listed housing sector, though Inland Homes bucked the trend, slumping 34%.
The housing plot developer experienced unforeseen planning delays for two major schemes under its Land and Asset Management segments.
As a result, it now expects to post a pretax loss of GBP37.1 million for the full-year, widened from previous expectations of a GBP29.3 million loss.
Suffering a late share price slide after a decent session, InterContinental Hotels Group dropped 0.8%. Shares had been about 2% higher earlier on Tuesday.
Shortly before the close of play, it reported that parts of its technology systems have "been subject to unauthorised activity".
The Crowne Plaza and Holiday Inn owner's booking channels and other applications have been "significantly disrupted since yesterday, and this is ongoing," the company said.
The company has notified relevant regulatory authorities and is working with its technology suppliers. External specialists have also been engaged to investigate the incident.
IHG said it is working to restore all systems as soon as possible.
Brent oil was trading at USD93.17 a barrel at the time of European equities close, lower from USD95.49 late Monday. Gold was quoted at USD1,702.85 an ounce, down from USD1,710.56.
On Wednesday's economic calendar, there is a eurozone gross domestic product reading at 1000 BST, after the Halifax UK house price index at 0700 BST. The latest interest rate from the Bank of Canada is given at 1500 BST.
The local corporate calendar has annual results from housebuilder Barratt Developments, and trading statements from cycling products seller Halfords and retailer WH Smith.
By Eric Cunha; ericcunha@alliancenews.com
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