(Alliance News) - Stocks in London ended firmly in green on Tuesday, with the FTSE 100 benefiting from news of fresh stimulus measures in China and a major environmental regulation change in the UK.
The FTSE 100 index closed up 126.41 points, or 1.7% at 7,464.99 on Tuesday. The FTSE 250 ended up 337.57 points, or 1.9%, at 18,468.59. The AIM All-Share closed up 7.28 points, or 1.0%, at 740.95.
The Cboe UK 100 ended up 1.7% at 743.97, the Cboe UK 250 closed up 2.0% at 16,164.14, and the Cboe Small Companies ended up 1.7% at 13,017.22.
On Monday, China's regulators decided to cut in half tax paid on stock trades in one of the country's latest attempts to help kickstart its ailing economy.
The Ministry of Finance and its State Taxation Administration said in a joint statement the move was designed to "invigorate the capital market and boost investor confidence".
The tax cut - the first of its kind since 2008 - was welcome news to investors, with the Hang Seng and Shanghai Composite closing higher on Monday and Tuesday. It also helped give the FTSE 100 a spring in its step on Tuesday as the index returned to trade following a bank holiday.
London's flagship index was further boosted by news that the UK government intends to some EU-era regulations on waterway pollution in a bid to increase housebuilding in England.
UK Levelling-Up Secretary Michael Gove said he would free the property industry from "nutrient neutrality" laws, first introduced in 2017 and designed to make sure new developments don't leak nutrients into local wetlands or waterways in protected areas.
The UK Department for Levelling Up, Housing & Communities said scrapping environmental protections on nutrient neutrality would allow for an additional 100,000 homes to be built in England by 2030.
"The way EU rules have been applied has held us back," Gove said.
"Protecting the environment is paramount which is why the measures we're announcing today will allow us to go further to protect and restore our precious waterways whilst still building the much-needed homes this country needs," Gove continued.
The news gave the UK's biggest housebuilders a boost on Tuesday.
In the FTSE 100, shares in Persimmon, Taylor Wimpey and Barratt Developments closed up 5.0%, 3.8%, and 4.1% respectively. Meanwhile, in the FTSE 250, shares in Crest Nicholson and Bellway closed up 7.4% and 4.2%, respectively.
Elsewhere in London's FTSE 100, Bunzl added 3.1% as investors cheered moderately higher annual guidance and two new acquisitions from the firm.
The distribution services company reported that revenue increased 4.5% to GBP5.91 billion in the first half of 2023, from GBP5.65 billion the year prior. Pretax profit grew 6.9% to GBP317.1 million, from GBP296.6 million a year ago.
"We now expect adjusted operating profit to be moderately higher than in 2022 at constant exchange rates, with operating margin remaining strong and moderately higher than that achieved in the prior year. At constant exchange rates we expect group revenue in 2023 to be slightly higher than in 2022," Bunzl said.
In 2022, the company reported adjusted operating profit of GBP885.9 million and revenue of GBP12.04 billion. Its operating margin was 7.4%.
In the FTSE 250, Liontrust Asset Management climbed 1.7% after it formally declared its offer to buy GAM unsuccessful, and added it can demand repayment of a multi-million-pound sum extended to GAM within the next month.
Liontrust had announced last Thursday that it expected the bid to fail, after winning the support of only a third of Zurich-based GAM's shareholders.
On AIM, Pelatro plunged 69%.
The marketing software provider said it has decided to cancel shares from AIM market in London, citing costs, management time required, and regulatory burden of maintaining a listing.
It will announce schedule for the cancellation, including date of general meeting for shareholders to vote on the plan, "in due course".
In European equities on Tuesday, the CAC 40 in Paris ended up 0.7%, while the DAX 40 in Frankfurt ended 0.9% higher.
Stocks in New York were higher at the London equities close, with the Dow Jones Industrial Average up 0.5%, the S&P 500 index up 1.1%, and the Nasdaq Composite up 1.6%.
Wall Street investors were looking ahead to a data-heavy week in the US. Focus will be on a gross domestic product reading on Wednesday, personal consumption expenditures data on Thursday and the latest non-farm payrolls report on Friday.
Kicking of the US data barrage, the US Bureau of Labor Statistics reported on Tuesday that the number of US job openings fell to 8.827 million on the last business day of July.
The figure was 6.7% below FXStreet-cited consensus of 9.465 million and down 3.7% from 9.165 million a month earlier.
Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, had said prior to the print that a lower-than-expected number would point to "loosening" jobs market and could soften hawkish Federal Reserve expectations.
Currently, markets see a 86% chance of the US central bank holding rates steady at its next meeting in September. Just one day ago, markets saw a 78% chance of this outcome.
The dollar weakened as the JOLTS report helped boost risk appetite.
The pound was quoted at USD1.2616 at the London equities close on Tuesday, up from USD1.2571 at the London equities close on Friday. The euro stood at 1.0845, higher against USD1.0783 late Friday.
Against the yen, the dollar was trading at JPY146.04 late Tuesday, lower compared to JPY146.27 late Friday.
Gold was quoted at USD1,936.07 an ounce, sharply higher against USD1,906.88 at the close on Friday. The yellow metal has an inverse relationship with the greenback.
Oil prices also advanced on Tuesday as worries over the tropical storm Idalia in the US posed a threat to the already tight energy supply.
Brent oil was quoted at USD84.24 a barrel at the London equities close on Tuesday, up from USD83.57 at the close on Friday.
Storm Idalia strengthened into a hurricane on Tuesday as forecasters predicted it would intensify and become "extremely dangerous" before making landfall in the US state of Florida.
Swissquote's Ozkardeskaya warned that Idalia could interrupt crude production in the US Gulf Coast, the shoreline on the Gulf of Mexico, and put an additional short-term pressure on oil prices.
In Wednesday's UK corporate calendar, there are full-year results from arts and crafts, stationery, and books retailer TheWorks.co.uk.
The economic calendar has UK Zoopla house prices overnight and an EU economic sentiment indicator at 1000 BST.
By Heather Rydings, Alliance News senior economics reporter
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