21st Jul 2026 17:03
(Alliance News) - Stock prices in London closed higher on Tuesday, as the new UK Chancellor John Healey reiterated his commitment to fiscal discipline, and defence stocks climbed.
The FTSE 100 index closed up 61.15 points, 0.6%, at 10,585.91. The FTSE 250 ended up 211.69 points, 0.9%, at 23,752.40, and the AIM all-share closed up 8.24 points, 1.1%, at 766.13.
The Cboe UK 100 was up 0.4% at 1,052.00, the Cboe UK 250 was 1.2% higher at 20,636.37, and the Cboe small companies was up 0.2% at 18,437.57.
In European equities on Tuesday, the CAC 40 in Paris closed up 0.3%, while the DAX 40 in Frankfurt ended 0.7% higher.
The pound fell to USD1.3375 on Tuesday afternoon from USD1.3418 at the equities close on Monday. Against the euro, sterling was lower at EUR1.1720 from EUR1.1755 a day prior.
The euro stood was lower at USD1.1408 from USD1.1441. Against the yen, the dollar was trading higher at JPY162.97 compared to JPY162.56.
New UK Prime Minister Andy Burnham told ministers he will lead a "cost-of-living government" after announcing an GBP850 million tax cut on electricity bills.
Burnham used the first meeting of his Cabinet to say that ministers must give people "a sense that help is coming".
He vowed to always "show how we're going to pay" for policies to help hard-pressed people.
AJ Bell analyst Russ Mould said: "Andy Burnham is now confirmed as the nation's seventh prime minister in ten years, with John Healey as our ninth Chancellor of the Exchequer in the same time span, and the electorate and financial markets alike now wait to see what policy initiatives may follow.
"Whether you like him or his policies or not, it is understandable that Burnham desires to plan for the long-term and, to use his words, make politics work better and personally act as a circuit-breaker after the recent torrid pace of change in Downing Street."
The new Chancellor John Healey said he wants to build "new hope" for Britain, as he addressed staff at the Treasury for the first time.
Healey promised fiscal control would be his "first duty", as he said it would be the "bedrock of economic stability".
Labour would usher in a "new era of devolution and public control", he told civil servants in the department's building in Whitehall, as he promised "principles not political buzzwords".
Defence stocks were higher in the UK on Tuesday, following Healey's appointment.
Healey was defence secretary in Keir Starmer's government, but left the position after a deeming defence investment unveiled by former prime minister to not be sizeable enough.
Shares in Babcock International ended 7.6% higher on Tuesday, while BAE Systems finished 1.8% higher.
Meanwhile, Iran stepped up its attacks in the Middle East on Tuesday, two weeks after its war with the US resumed, with sirens sounding in Bahrain and Jordan announcing it had intercepted two waves of missiles and drones.
Iran's Yemeni allies, the Houthis, declared they would blockade Saudi Arabia's ports, in what would throw the world's energy markets into further chaos after the Islamic republic blockaded the crucial Strait of Hormuz.
Brent oil was higher at USD91.36 a barrel on Tuesday afternoon, from USD88.07 late Monday.
Stocks in New York were higher. The Dow Jones Industrial Average was up 0.7%, the S&P 500 index was 0.8% higher, and the Nasdaq Composite gained 1.3%.
The yield on the US 10-year Treasury widened to 4.63% on Tuesday from 4.59% on Monday. The yield on the US 30-year Treasury stretched to 5.13% from 5.11%.
Back in London, shares in miners were higher, as Antofagasta ended 5.8% higher, Fresnillo climbed 4.4% and Endeavour Mining finished up 3.8%.
Gold climbed to USD4,077.93 an ounce on Tuesday from USD4,011.08 at Monday's close.
Segro ended down 3.4% after it shrugged off another Prologis offer, which analysts agreed falls short.
It is offering 0.0890 of a new Prologis share for each Segro share, which valued the FTSE 100 listing at 993 pence per share, or GBP13.5 billion in total, when the offer was made. Prologis noted the offer price is a 9.7% premium to Segro's adjusted net asset value of 905p per share at June 30.
Prologis said it believes that the Segro defence relies on "unrealistic risk assessments and assumptions to arrive at the various [net asset value] uplifts and earnings projections."
On the FTSE 250 index, shares in Mitie jumped 39% as it agreed to a GBP3.1 billion takeover by rival outsourcer OCS Group.
Mitie on Tuesday agreed to a recommended cash acquisition by OCS Group, valuing the London-based facilities management company at 221.6 pence per share, comprising 218.5p in cash and a final dividend of up to 3.1p. The offer values Mitie's equity at around GBP3.1 billion and represents a 45% premium to Monday's closing price of 151.0p.
AJ Bell investment director Russ Mould said the transaction was another sign that merger and acquisition activity in the UK remains strong despite the summer holiday season.
Ocado shares finished up 3.1% after the firm announced a new customer fulfilment centre agreement with an unnamed "fast-growing European retailer".
Ocado said it has agreed to build a large automated customer fulfilment centre, or CFC, which is due to go live in financial 2028.
The grocer did not disclose the financial terms of the agreement.
On the AIM market, shares in IQE jumped 30% after it raised its revenue guidance and said its performance in the first half exceeded expectations.
It said "strong demand" across all core segments resulted in first half revenue of at least GBP64 million.
The company expects this momentum to continue through 2026. It now expects revenue growth in excess of 30% on-year, resulting in adjusted earnings before interest, tax, depreciation and amortisation in the low-teen million pound range.
"Our long-established leadership in [indium phosphide] and other key material systems means we are critically embedded in supply chains enabling industry trends that will continue to deliver further progress in [the second half]," said Chief Executive Officer Jutta Meier.
Meanwhile, London Stock Exchange Group unveiled plans for 24-hour trading venue open on weekdays in London, with a view to improving access for investors in different time zones.
Shares in LSEG ended the day 2.4% lower.
The trading venue operator has dubbed it London Stock Exchange 24, or LSE 24, and said it offers "global investors greater flexibility to respond to market events, access liquidity across time zones and manage risk".
LSE 24 will operate Monday to Friday from 17:00 to 07:50 with a thirty-minute pause between 18:30 and 19:00 for end-of-day procedures.
The biggest risers on the FTSE 100 were Babcock International, up 79.00p at 1,116.50p, Antofagasta, up 202.00p at 3,667.00p, Marks & Spencer, up 17.60p at 397.50p, Fresnillo, up 109.00p at 2,566.00p, and Endeavour Mining, up 130.00p at 3,554.00p.
The biggest fallers on the FTSE 100 were Segro, down 30.29p at 870.51p, Reckitt Benckiser, down 130.00p at 4,938.00p, Relx, down 64.00p at 2,454.00p, Autotrader, down 12.20p at 490.00p, and London Stock Exchange Group, down 210.00p at 8,634.00p.
On Wednesday's economic calendar, UK inflation data is due at 0700 BST.
On Wednesday's UK corporate calendar, there are trading statements from Fresnillo, Greencore, JD Wetherspoon and Liontrust Asset Management, as well as half year results for PensionBee and Reach.
By Michael Hennessey, Alliance News reporter
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