30th Sep 2025 16:58
(Alliance News) - The FTSE 100 ended the quarter with a flourish, hitting an all time high on Tuesday, as hopes grew of a peace settlement in the Middle East and as Keir Starmer reiterated a commitment to fiscal responsibility.
The FTSE 100 index closed up 50.59 points, 0.5%, at 9,350.43, beating its previous record close of 9,321.40 in August.
The blue chip index had earlier set a new best level of 9,363.57. It has risen 6.7% in the last three months.
The FTSE 250 ended 149.08 points higher, 0.7%, at 22,015.56, and the AIM All-Share ended up 2.99 points, 0.4%, at 783.17.
The Cboe UK 100 was up 0.5% at 937.24, the Cboe UK 250 ended 0.9% higher at 19,280.33, and the Cboe Small Companies ended up 0.8% at 17,657.95.
Prime Minister Starmer said at the Labour Party conference that "fixing our public finances, investing in new infrastructure, helping our public services off their knees ... will be better for growth."
He thanked "every business in our country" for taking the brunt of last year's tax raises when the government increased employer national insurance costs.
"We asked a lot at the last budget," he noted.
Calling for fiscal discipline Starmer said: "It does not matter if it is unfunded tax cuts or unfunded spending...You lose the economy and working people pay the price."
Starmer spoke after figures showed UK gross domestic product grew as expected during the second quarter of 2025.
According to the Office for National Statistics, real GDP is estimated to have increased by 0.3% between April and June, in line with the ONS's first estimate.
The rate of growth slowed from a 0.7% rise in the prior quarter.
The pound was quoted higher at USD1.3443 at the time of the London equity market close on Tuesday compared to USD1.3432 on Monday. The euro stood at USD1.1727, lower against USD1.1731. Against the yen, the dollar was trading at JPY147.98, lower compared to JPY148.57.
The yield on the US 10-year Treasury was quoted at 4.12% trimmed from 4.14% on Monday. The yield on the US 30-year Treasury stood at 4.69%, narrowed from 4.71%.
In European equities on Tuesday, the CAC 40 in Paris closed up 0.1%, while the DAX 40 in Frankfurt ended up 0.6%.
Stocks in New York were lower at the time of the London close. The Dow Jones Industrial Average was down 0.4%, the S&P 500 index was 0.2% lower, while the Nasdaq Composite declined 0.2%.
US markets fell back after weak consumer confidence data and as a federal government shutdown looms.
President Donald Trump met key congressional Republicans and Democrats at the White House on Monday, hoping to revive stalled spending negotiations on the eve of a looming US government shutdown.
Without Congress passing a bill to fund federal operations before midnight Tuesday night, the government will partially close up shop – and plunge Washington into a new round of political crisis.
AJ Bell's Investment Director Russ Mould said relations between the Democrats and Republicans are "frostier than an Alaska morning", so markets are not confident on the prospects of agreeing a deal before midnight tonight.
"One of the biggest short-term concerns for markets is the impact this would have on the release of government data – particularly the jobs number due on Friday – without which the Federal Reserve might not feel as confident about cutting interest rates," he added.
Ahead of a possible shutdown, a report showed US consumer confidence slumped to its lowest level since Trump's tariffs came into effect in April, with respondents expressing growing concern about inflation.
The Conference Board's consumer confidence index slipped 3.6 points to 94.2 in September, down from a revised 97.8 a month earlier.
There was better news on jobs where a Bureau of Labour Statistics report showed job openings picked up slightly in August from July.
On the FTSE 100, Rolls Royce firmed 2.3% as the Financial Times reported Boeing has had exploratory discussions with the UK aerospace firm about potentially providing an engine for a new single-aisle aircraft that would replace the US group's best-selling 737 Max jet.
Tufan Erginbilgiç, Rolls-Royce chief executive, hosted his Boeing counterpart Kelly Ortberg at the UK company's Derby site in February, where they discussed new engine technology, according to FT sources.
But bookmaker Entain fell 3.5% after Chancellor Rachel Reeves hinted gambling taxes could be raised in the budget.
While the weak oil price weighed on BP and Shell, down 2.0% and 1.8% respectively on hopes for a peace deal in the Middle East after Israel backed a US-backed Gaza peace plan.
Brent oil fell to USD65.99 a barrel on Tuesday from USD67.81 late Monday.
On the FTSE 250, PayPoint surged 11% as it said it will pay a 50 pence per share special dividend after securing an investment into its Collect+ business.
Paypoint said Royal Mail owner International Distribution Services will make a GBP43.9 million investment in Collect+, and take 49% ownership, valuing the Collect+ business at GBP90 million.
Collect+ is a UK parcel service that uses a network of local shops and convenience stores for customers to pick up and drop off packages.
But Asos slid 3.9% as the online fashion retailer warned on annual sales amid a "soft consumer backdrop", though it expects to report an improvement in profit margin.
The London-based company expects to report revenue "slightly below consensus estimates" for the financial year, which concluded around the start of this month.
The weaker than expected revenue is due to the firm prioritising "higher quality sales against a soft consumer backdrop".
Gold traded at USD3,836.50 an ounce on Tuesday, up against USD3,828.66 on Monday.
The biggest risers on the FTSE 100 were Airtel Africa, up 12.40 pence at 244.00p, Reckitt Benckiser, up 212.00p at 5,718.00p, GSK, up 56.50p at 1,584.50p, Melrose Industries, up 16.20p at 608.80p and Rentokil Initial, up 9.20p at 375.80p.
The biggest fallers on the FTSE 100 were Entain, down 32.00p at 873.80p, Pershing Square, down 112.00p at 4,614.00p, BP, down 8.85p at 425.75p, Antofagasta, down 56.00p at 2,751.00p and Shell, down 49.50p at 2,646.50p.
Wednesday's global economic calendar has a slew of manufacturing PMI readings and the ADP jobs report in the US.
Wednesday's UK corporate calendar sees a trading statement from bakery chain Greggs and retailer Topps Tiles.
By Jeremy Cutler, Alliance News reporter
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