3rd Dec 2024 17:17
(Alliance News) - Stocks in London closed higher on Tuesday with blue-chips taking heart from stimulus hopes in China and mid-caps lifted by a number of well received earnings.
The FTSE 100 index rose 46.52 points, 0.6%, at 8,359.41. The FTSE 250 ended 123.69 points higher, 0.6%, at 20,892.74, and the AIM All-Share rose 2.05 points, 0.3%, at 735.09.
The Cboe UK 100 ended up 0.8% at 840.40, the Cboe UK 250 advanced 0.7% at 18,382.22, and the Cboe Small Companies gained 0.6% to 15,973.50.
In Europe, stocks held in the green. The CAC 40 in Paris ended up 0.3%, while the DAX 40 in Frankfurt advanced 0.6%, topping 20,000 for the first time in its history.
Political uncertainty continues to overshadow France. French legislators are expected to hold a vote of no confidence against the government of French Prime Minister Michel Barnier on Wednesday afternoon, parliamentary sources said on Tuesday, AFP reported.
A no-confidence motion tabled by the left-wing alliance is likely to be adopted after the far-right National Rally said it would back it. The debate is set to begin at 1600 CET on Wednesday.
So far, extreme financial turbulence has been avoided.
Stephen Innes at SPI Asset Management said while the political upheaval is reaching a "critical point", thus far, the fallout across European markets has been "surprisingly contained".
But Capital Economics cautioned that as France is unlikely to have a government with a mandate to tighten fiscal policy anytime soon, the risks to its bond market will continue to grow.
"Its debt dynamics are not as bad as those of Greece in the 2010s, but a French sovereign debt crisis would be a problem for the euro-zone as a whole," it added.
In New York, markets were subdued. The Dow Jones Industrial Average was down 0.4% at the time of London's close, the S&P was 0.2% lower, while the Nasdaq was flat.
New York-listed shares in South Korean companies fell at Tuesday’s open after the country's conservative president Yoon Suk Yeol declared martial law.
Yoon, a hardline former chief prosecutor, said in a late night television address on Tuesday that he would "eliminate anti-state forces as quickly as possible and normalise the country".
Telecoms giant KT Corp was down 1.4% in New York. London-listed shares in Samsung Electronics fell 6.6% on the news.
Elsewhere, demand for US workers rose more than expected in October.
There were 7.7 million job vacancies in October, up from 7.4 million in September, the labour department said. Economists had been expecting just under 7.5 million openings.
The figures come ahead of Friday's nonfarm payrolls report for November, which will likely to dictate whether interest rates are cut at December's FOMC meeting.
Bank of America expects nonfarm payrolls to rise by 240,000 in November after coming in at just 12,000 in October.
"This above-consensus forecast is driven by expected payback for the temporary drag on payrolls in October due to Hurricane Milton and the Boeing strike," BofA said.
Fed Governor Christopher Waller told a conference in Washington on Monday that he was likely to back a further rate cut.
"At present I lean toward supporting a cut to the policy rate at our December meeting," he said, noting that many people still expected inflation to fall to the Fed's 2% target over the medium term.
Analysts at Brown Brothers Harriman noted odds of a December cut have risen to nearly 75% but "it’s clear that this Friday’s jobs report will ultimately determine policy."
The pound was quoted at USD1.2660 late on Tuesday afternoon in London, up from USD1.2643 at the time of the European equities close on Monday. The euro stood at USD1.0513, up from USD1.0486.
Against the yen, the dollar was trading at JPY149.44, rising from JPY149.24.
Helping to lift the mood in London, China's top leaders are preparing a closed-doors meeting next week to talk economic targets and stimulus plans for next year, Bloomberg reported.
The report boosted mining stocks on the blue-chip FTSE 100. Antofagasta rose 2.2%, Fresnillo rose 2.8% and Glencore rose 1.4%.
South Korea's sudden political instability pushed the oil price higher, boosting oil majors and London index heavyweights BP and Shell which rose 1.8% and 1.7% respectively.
Brent oil was quoted at USD73.67 a barrel late Tuesday afternoon, up from USD71.85 at the time of the London equities close.
Gold was little changed at USD2,644.88 an ounce compared with USD2,642.00 on Monday.
easyJet was prominent on the leaderboard, climbing 2.9%. Peel Hunt raised its share price target to 900 pence from 850p and reiterated a 'buy' rating.
On the FTSE 250, earnings delivered double-digit percentage increases for DiscoverIE, Greencore and Victrex while SSP also jumped.
DiscoverIE soared 16% as its operating profit and margins increased despite a decline in revenue, and it said it is on track to deliver full-year earnings in line with expectations.
The Guildford, Surrey-based customised electronics manufacturer and designer said third quarter trading is in line with expectations with the order run rate ahead of sales and ahead of the second quarter.
Dublin-based convenience food maker Greencore jumped 13% after better-than-expected annual profit, a share buyback and the restoration of the dividend after a 5-year hiatus.
For the new financial year, it expects adjusted operating profit within the top half of the range of current market expectations, which it puts at GBP98.1 million to GBP107.1 million.
"Greencore is continuing to deliver, both operationally in terms of efficiencies and profit progression, but also in terms of expectations management, where 'beat and raise' has become the new normal," analysts at Jefferies said.
Lancashire, England-based polymer solutions provider Victrex jumped 14% despite reporting a 68% drop in annual profit.
More optimistically, the company expects at least mid-single digit volume growth in the new financial year should current demand levels remain on track.
Meanwhile, SSP was also in demand, rising 9.6%.
The Upper Crust owner reported pretax profit of GBP118.6 million in the year to September 30, an increase of 35% from GBP88.1 million. Revenue improved 14% to GBP3.43 billion from GBP3.01 billion, including like-for-like growth of 9%.
On the downside, Currys slipped 2.5% after Deutsche Bank downgraded to 'hold' from 'buy'.
Wednesday's global economic diary sees ADP private payrolls data in the US plus a slew of composite PMI readings.
Wednesday's local corporate calendar sees full-year results from Treatt and Tritax EuroBox.
By Jeremy Cutler, Alliance News reporter
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