(Alliance News) - Stocks in London ended higher on Tuesday following a volatile January for equity markets, as investors took heart from some comments from US Federal Reserve officials with fears of aggressive policy tightening casting a shadow.
Comments from some leading figures at the bank at the weekend added to expectations the policy board would go hard and fast, though some were out on Monday trying to play down such a move.
Atlanta Fed boss Raphael Bostic said he was not in favour of such a big hike next month, having told the Financial Times at the weekend that his colleagues had not ruled it out.
Meanwhile, Kansas City Fed President Esther George said it was in "no one's interest to try to upset the economy with unexpected adjustments", and the head of the San Francisco arm, Mary Daly, added that measures "have to be gradual and not disruptive".
The FTSE 100 index closed up 71.41 points, or 1.0%, at 7,535.78. The FTSE 250 ended up 241.32 points, or 1.1%, at 22,167.94, and the AIM All-Share closed up 5.60 points, or 0.5%, at 1,100.57.
The Cboe UK 100 ended up 0.9% at 747.06, the Cboe UK 250 closed up 0.9% at 19,744.15, and the Cboe Small Companies ended up 1.1% at 15,512.40.
In European equities, the CAC 40 stock index in Paris ended up 1.4%, while the DAX 40 in Frankfurt ended up 1.0%.
"European markets have got off to a strong start to February, after last night's push back by a number of Federal Reserve officials, who poured cold water on some of the hawkish narratives being put out with respect to the Federal Reserve's hiking timeline," said CMC Markets analyst Michael Hewson.
"Amongst the best performers we're seeing some decent gains amongst the basic resource and banks, with the likes of Rio Tinto, Glencore, and Anglo American near the top of the pile," Hewson added.
Blue-chip miners Rio, Glencore and Anglo ended up 3.2%, 3.4% and 3.2% respectively.
In the FTSE 100, precious metals miner Fresnillo ended the best performer, up 4.0%, tracking spot gold prices higher.
Gold stood at USD1,805.05 an ounce at the London equities close, higher against USD1,797.05 late Monday.
Scottish Mortgage Investment Trust, which has stakes in the likes of Tesla, Nvidia and Amazon, ended the second best performer, up 3.6%, tracking a recovering Nasdaq Composite index.
On AIM, shares in retailer Joules Group plunged 46%. The lifestyle brand warned on annual profit and said that revenue over the Christmas period and January was lower than it had expected.
Revenue in the nine weeks ending January 30, part of its financial third quarter, was 31% higher annually, which was below board expectations.
Joules now expects adjusted pretax profit for the financial year of no less than GBP5 million, meaning as much as 18% below GBP6.1 million from financial 2021.
The pound was quoted at USD1.3505 at the London equities close, up sharply from USD1.3425 at the close Monday.
On the economic front, the UK's manufacturing sector posted another month of expansion in January, though numbers suggested a slower improvement, as new order growth ebbed and lead times increased.
The IHS Markit-CIPS PMI eased to 57.3 points in January from 57.9 points in December. The final figure topped the flash estimate of 56.9 points. It was the UK manufacturing sector's 20th successive month of expansion.
The euro stood at USD1.1247 at the European equities close, up from USD1.1211 late Monday, following upbeat economic data from the continent.
Factories in the eurozone regained momentum at the start of the new year in tandem with easing supply chain issues, survey data showed.
IHS Markit's manufacturing PMI for the bloc rose to 58.7 points in January from 58.0 in December, with the reading further above the no-change mark of 50.0, indicating growth sped up at the start of 2022.
However, the reading was just below the flash figure of 59.0. January's five-month high came alongside demand conditions improving and input price inflation and supply chain challenges showing signs of easing.
Elsewhere, unemployment in the eurozone declined in December, with the jobless rate moving further below pre-virus levels, data showed.
The unemployment rate was 7.0% in December, down from 7.1% in November. In December 2020, the jobless rate stood at 8.2%. The latest figure was further below the 7.3% reported for February 2020. December's figure was the lowest since the agency began its record in April 1998.
Against the yen, the dollar was trading at JPY114.80, down from JPY115.25 late Monday.
Stocks in New York were mostly lower at the London equities close opening a new month uncertainly after a bruising January dominated by worries over inflation and shifting monetary policy.
The DJIA was up 0.1%, the S&P 500 index down 0.1% and the Nasdaq Composite down 0.2%.
On the corporate front, Exxon Mobil Corp was up 6.1% after it was back in the black for 2021 as the oil major benefited from a rally in oil prices and structural cost-savings.
In the final quarter of 2021, the Irving, Texas-based company reported earnings of USD8.87 billion against a loss of USD20.07 billion in the same quarter the previous year.
The company's diluted fourth-quarter earnings per share was USD2.08, swinging from a loss per share of USD4.70.
Tech companies EA, PayPal, AMD and Alphabet report after the market close in New York.
Brent oil was quoted at USD89.50 a barrel at the London close, down sharply from USD91.12 at the close Monday, ahead of the 25th OPEC and non-OPEC Ministerial Meeting on Wednesday.
The economic events calendar on Wednesday has the US ADP national employment report at 1315 GMT. Financial markets remain closed in Hong Kong and Shanghai for Lunar New Year.
The UK corporate calendar on Wednesday has third-quarter results from utility Severn Trent and telecommunications firm Vodafone Group.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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