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(Alliance News) -Â London's FTSE 100 early Tuesday failed to get a boost from improved market sentiment overnight as the pound strengthened.
Also weighing on large-cap index in early trade were share price slides for International Consolidated Airlines and Schroders.
The FTSE 100 index was down 5.22 points, or 0.1%, at 7,198.61 early Tuesday. The mid-cap FTSE 250 index was up 85.10 points, or 0.4%, at 23,053.84. The AIM All-Share index was up 2.84 points, or 0.2%, at 1,240.30.
The Cboe UK 100 index was down 0.1% at 714.21. The Cboe 250 was up 0.4% at 20,807.22 and the Cboe Small Companies up 0.2% at 15,624.15.
In mainland Europe, the CAC 40 in Paris and the DAX 40 in Frankfurt were both flat early Tuesday.
Weighing on London's overseas earnings-heavy FTSE 100 index was a stronger pound.
"A series of reports lifting and bringing forward hiking expectations in the UK, Europe, Australia, and New Zealand could be taking the wind out of the Fed taper trade. The dollar fall appears to have sparked some technical breakouts as well which are probably attracting algorithmic fast money," said Jeffery Halley, senior market analyst at Oanda.
This comes after Bank of England Governor Andrew Bailey over the weekend cautioned the UK central bank will have to act to ease inflationary pressures.
The BoE governor spoke virtually on Sunday to a meeting of the G30 group of current and former central bankers. Bailey affirmed his view that recent spikes in inflation will be temporary. However, he warned that price increases could last until next year, citing the energy sector in particular.
Brent oil was trading at USD84.80 a barrel early Tuesday, softening from USD84.86 late Monday and off recent highs which saw crude prices trade just above USD86.00.
"That's why we, at the Bank of England, have signalled, and this is another such signal, that we will have to act," Bailey said, according to the FT. "But of course that action comes in our monetary policy meetings."
Sterling was quoted at USD1.3784 early Tuesday, higher than USD1.3711 at the London equities close on Monday.
The euro traded at USD1.1657, up from USD1.1595 late Monday, ahead of eurozone construction output data at 1000 BST.
Against the yen, the dollar eased to JPY114.01 versus JPY114.28.
In Asia on Tuesday, the Japanese Nikkei 225 index closed up 0.7%. In China, the Shanghai Composite ended up 0.7%, while the Hang Seng index in Hong Kong was up 1.4%. The S&P/ASX 200 in Sydney ended down 0.1%.
At the bottom of the FTSE 100 was International Consolidated Airlines, down 2.2% after Berenberg cut the British Airways parent to Hold from Buy.
Schroders also was dented by a ratings downgrade, shares falling 1.2% after Bank of America cut the asset manager to Neutral from Buy.
Gold was quoted at USD1,775.17 an ounce early Tuesday, higher than USD1,768.25 on Monday. Shares in precious metals miners traded higher as a result, with Polymetal International up 2.1% in early trade and Fresnillo up 2.0%.
Mid-cap gold miner Hochschild topped the FTSE 250, up 5.1%, as it set out plans to demerge 80% of Aclara Resources and list it on the Toronto Stock Exchange.
"This is the logical next step forward for our rare earth business. It is our belief that, as two standalone businesses, both Hochschild and Aclara will have the greatest potential for delivering long-term value creation," said Chair Eduardo Hochschild.
Hochschild will retain a 20% stake in Aclara.
Bellway rose 3.9% after the housebuilder saw profit double in its recent financial year and revenue back near pre-pandemic levels.
Revenue for the financial year that ended July 31 jumped 20% to GBP3.12 billion from GBP2.23 billion the year before. Bellway noted that this sales figure was only 2.8% below the record level achieved in the 2019 financial year.
The revenue rally led pretax profit to double to GBP479.0 million from GBP236.7 million. The home builder boosted its dividend to 117.5 pence from 50.0p.
Looking ahead, Bellway was confident as it highlighted a "substantial" order book and strengthened land bank, along with strong industry fundamentals. It expects to increase output by around 10% to over 11,100 new homes in the financial year ahead, after registering housing completions of 10,138, up 35%, in the recently ended year.
By Lucy Heming;Â lucyheming@alliancenews.com
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