(Alliance News) -Â While the start to Tuesday's session was cautious, the FTSE 100 index was firmly in the green by midday, helped by a weaker pound and share price gains for housebuilder Taylor Wimpey.
The FTSE 100 index was up 42.60 points, or 0.7%, at 6,631.13. The FTSE 250 was up 12.07 points, or 0.1%, at 21,233.53, and the AIM All-Share was down 0.2% at 1,190.07.
The Cboe UK 100 was up 0.7% at 660.38, the Cboe UK 250 was flat at 18,831.62, and the Cboe Small Companies up 0.2% at 13,302.22.
In European equities on Tuesday, the CAC 40 in Paris and the DAX 30 in Frankfurt were both up 0.5%.
Sophie Griffiths, a market analyst at Oanda, said some "cautious optimism" has started to seep into European markets.
Stocks on Wall Street surged on Monday, but caution crept into the Asian session overnight. While European stocks followed Tokyo and Hong Kong lower at the open, they nudged up as the session progressed, eyeing vaccine progress and US stimulus.
The US Senate will start its debate "this week" on US President Joe Biden's massive economic stimulus plan, Democratic Majority Leader Chuck Schumer said Monday.
The House of Representatives, also under Democratic control, on Saturday approved the USD1.9 trillion package designed to jumpstart the US economy after the implosion caused by the Covid-19 pandemic, and which included a hike in the federal minimum wage. The version of the bill the Senate will debate will not include the latter section on increasing minimum wage due to congressional rules governing the budgetary process.
After an hours-long debate, the lower chamber adopted the bill early Saturday by 219 votes, all Democratic, against 212, which included two Democrats, with the Republicans denouncing it as too costly and not specifically targeted enough.
Stocks in New York are set for a lower open on Tuesday, with the Dow Jones Industrial Average pointed down 0.1% - after a 2.0% rally on Monday. The S&P 500 and Nasdaq Composite are both headed for a 0.3% lower start.
"The FTSE is outperforming its European peers thanks to the weaker pound," Oanda's Griffiths noted.
Sterling was quoted at USD1.3902 midday Tuesday, lower than USD1.3953 at the London equities close on Monday.
The dollar was stronger across the board on Tuesday.
The euro eased to USD1.2026 from USD1.2055 late Monday. Against the yen, the dollar was quoted at JPY106.93, up versus JPY106.62.
Safe-haven gold also faltered against the stronger greenback. Gold was priced at USD1,730.20 an ounce, lower than USD1,737.01 on Monday.
Helping lift London's FTSE 100 was Taylor Wimpey, up 2.4% at midday after the housebuilder noted a good recovery in the second half of a "very challenging" year.
Completions fell 39% to 9,799, primarily due to site shutdowns in the second quarter due to the virus pandemic, with revenue for 2020 falling 36% to GBP2.79 billion. Pretax profit slumped 68% to GBP264.4 million.
"After an unusual and volatile year, our 2020 results are in line with market expectations," said Taylor Wimpey.
The FTSE 100 constituent continued that the 2021 selling season has started well, following on from a stronger-than-expected housing market recovery in the second half of 2020.
Taylor Wimpey added that it will be resuming ordinary dividend payments by returning GBP151 million, or 4.14 pence per share, as a final payout for 2020. The firm cancelled its 2019 final dividend and a planned special payout.
There was also some upbeat UK house price data out on Tuesday. UK house price growth surprisingly accelerated in February, according to figures from Nationwide.
Annually, UK house price growth was 6.9% in February, strengthening from the 6.4% rise seen for January. On a monthly basis, prices grew 0.7%, reversing the 0.2% dip seen at the start of the year.
This brought the average house price in the UK to GBP231,068 in February, the highest on record, from GBP229,748 in January.
At the bottom of the blue-chip index was Flutter Entertainment down 2.6% even as it said 2020 revenue more than doubled as a result of its merger with Stars Group.
The gambling firm's revenue for 2020 jumped substantially to GBP4.40 billion from GBP2.14 billion in 2019. This was below the estimate from Morgan Stanley, who predicted the Paddy Power owner would achieve revenue of GBP5.04 billion.
Adjusted earnings before interest, taxes, depreciation and amortisation also doubled to GBP889 million from GBP425 million in 2019, which reflects the addition of Stars Group. Pretax profit did not fare as well, dropping sharply to GBP1 million from GBP136 million.
Oil majors were soft, with BP down 1.4% and Royal Dutch Shell 'A' and 'B' shares 0.8% and 0.5% lower at midday. Brent oil was trading at USD63.48 a barrel, down from USD64.94 late Monday.
As members of the oil cartel OPEC and its allies meet this week to discuss adjusting output, analysts expect old tensions between oil producer giants to flare up again.
Russia and Saudi Arabia, respectively the world's second and third largest producers of oil after the US, had often been at loggerheads in the past, but when crude oil prices plunged due to the pandemic, they rallied to radically cut production levels and underpin prices. Now that prices have rebounded to pre-pandemic levels, at around USD65 a barrel, the two heavyweights and their partners will discuss how to move forward – and how much crude to release back onto the global market.
In the FTSE 250, Renishaw rallied 18% after putting itself up for sale. Renishaw is launching a formal sale process, after the pair who started the engineering and scientific technology firm in 1973 decided it is time to pass on the business.
Executive Chair David McMurtry and Non-Executive Deputy Chair John Deer, the company's founders, have indicated they intend to sell their "very substantial" shareholdings in Renishaw. Together, the founders own around 53% of the group, and have expressed a preference for the disposal of their entire combined shareholding.
The board has mulled over various options with its advisers, Renishaw said, and has unanimously concluded that it would be appropriate to investigate the sale of the company and thus is launching a formal sale process. UBS is acting as sole financial adviser and corporate broker to the company.
By Lucy Heming;Â lucyheming@alliancenews.com
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