6th Oct 2026 17:06
(Alliance News) - Stocks in London made progress on Tuesday, supported by falling oil prices, a calmer bond market and US stock gains.
"Brent crude oil fell back below USD100, much to the relief of the market," said Dan Coatsworth, head of markets at AJ Bell.
"Investors are praying that inflationary pressures start to ease off and central banks have less of a need to keep interest rates higher for longer," he added.
In London, the FTSE 100 index ended up 43.75 points, 0.4%, at 10,541.69. The FTSE 250 rose 91.58 points, 0.4%, to 24,215.33, and the AIM all-share advanced 3.31 points, 0.4%, to 783.62.
The Cboe UK 100 ended up 0.5% at 1,046.57, while the Cboe UK 250 ended 0.4% higher at 21,045.55, but the Cboe small companies fell 0.2% to 18,863.04.
In European equity markets on Tuesday, the CAC 40 in Paris ended up 0.4%, while the DAX 40 in Frankfurt closed 0.8% higher.
In New York, markets were higher, with the S&P 500 hitting a new all-time high. The Dow Jones Industrial Average was up 0.7% at the time of the closing bell in London. The S&P 500 was 0.9% higher, as was the Nasdaq Composite.
The price of Brent fell back below USD100 as investors weighed developments in the Middle East.
Brent oil was quoted at USD98.37 a barrel in London on Tuesday, down from USD102.32 late on Monday.
David Morrison, analyst at Trade Nation noted traders reacted positively "following reports that Saudi-backed Yemeni forces had driven Iranian-backed Houthis out of the port town of Mocha on the Red Sea. Later, it was confirmed that Saudi-backed forces had wrested back control of the Bab el-Mandeb Strait, thereby reopening this vital chokehold linking the Red Sea to the Gulf of Aden."
In addition, analysts pointed to reports showing larger volumes of oil have been crossing the Strait of Hormuz and that oil flows through Saudi Arabia's key East-West pipeline have been recovering.
But ING commodities strategists Warren Patterson and Ewa Manthey cautioned that while there are growing signs of a recovery in oil flows from the Persian Gulf, the market remains "nervous" about potential supply disruptions from the region.
The cooling oil price brought some calm to bond markets, easing inflation fears. The dollar also fell back against the euro and the pound, but held firm against the yen.
The yield on the US 10-year Treasury was quoted at 5.27% on Tuesday, narrowed from 5.33% at the same time on Monday. The yield on the US 30-year Treasury was quoted at 5.63%, down from 5.68%.
Against the dollar, the euro rose to USD1.1264 from USD1.1193. Against the yen, the dollar was trading at JPY158.07, up from JPY157.99.
The pound was quoted at USD1.3280 on Tuesday, up from USD1.3218 at the same time on Monday. Against the euro, sterling was little changed at EUR1.1791 from EUR1.1792.
In the UK, Bank of England policymaker Catherine Mann warned that UK consumer price index inflation is set to hit 4% around the turn of the year.
At a conference hosted by economic advisors TS Lombard, Mann, a hawkish member of the Bank of England's Monetary Policy Committee, said that the UK economy risks getting further entrenched in wage negotiations early 2027.
On the FTSE 100, Informa rose 3.0% as it said it was raising GBP940 million to fund the GBP2.24 billion acquisition of Clarion Events, and hive-off its Academic business, Taylor & Francis, as it focuses on its business-to-business operation.
The London-based business information and exhibitions group is buying Clarion, the UK-based owner of more than 100 B2B live event brands, from New York asset manager Blackstone.
Panmure Liberum analyst Sean Kealy called it an "extremely front-footed move", saying that Informa is "firmly pushing forwards" with this significant reshaping of the portfolio.
Lenders were in focus amid reports that Chancellor John Healey has told the heads of Britain's big banks that he hasn't yet decided whether to tax the sector in this month's budget.
Bloomberg reported that the chancellor said the UK faces a tough fiscal position, but no decision on tax has been made. Healey met with banks including HSBC, Barclays, Lloyds and NatWest on Tuesday.
HSBC closed up 0.8%, Lloyds gained 1.6%, and NatWest firmed 0.8%.
Defence manufacturers were on the back foot as the Times said UK Prime Minister Andy Burnham is considering delaying a decision about when the government will increase defence spending until the autumn of next year in the hope that Britain's economy improves.
The government had been expected to hold the spending review, which would set out a timetable for increasing defence spending to 3% of GDP, in the spring. The review will set out plans for all government spending up until 2030.
However, the Times suggested ministers are now considering delaying the review so it can take place alongside the next budget, enabling the government to raise taxes or cut spending to fund the increase. Hitting the Nato defence spending target would cost an extra GBP10 billion a year.
BAE Systems fell 4.1%, and Babcock International slipped 2.1%, while on the FTSE 250 defence and security firm QinetiQ was down 5.4%.
On the FTSE 250, Asos plunged 9.6% after confirming it had been hit by a cyberattack.
The fast fashion company said an unauthorised customer notification was sent to its customers.
Basic personal information may have been accessed, Asos said, although it does not believe that payment-card information or account passwords were impacted.
Its website and app are operating as normal, and the firm said it is too early to quantify any potential impact on trading.
Among small caps, Reveille Resource soared 34% as it announced the appointment of former US secretary of state and CIA director Mike Pompeo as non-executive chair.
In addition, Ajax Resources said it had increased its stake in the London-based natural resources investment company to around 18%.
Gold was quoted at USD4,163.00 an ounce, up from USD4,137.43.
The biggest risers on the FTSE 100 were Whitbread, up 125.00p at 2,551.00p, Weir, up 80.00p at 2,662.00p, Informa, up 25.40p at 887.20p, Next, up 415.00p at 14,595.00p and Burberry Group, up 28.00p at 1,031.50p.
The biggest fallers on the FTSE 100 were BAE Systems, down 79.00p at 1,855.00p, Melrose Industries, down 14.10p at 461.00p, Rolls Royce Holdings, down 39.80p at 1,438.20p, Ithaca Energy, down 7.20p at 274.20p and IG Group Holdings, down 24.00p at 962.00p.
Wednesday's local corporate calendar has a trading statement from oil major Shell.
Wednesday's global economic calendar has German industrial production figures, the Lloyds house price index in the UK, US consumer inflation expectations data and the minutes of September's Federal Open Market Committee meeting.
By Jeremy Cutler, Alliance News reporter
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