20th May 2025 11:59
(Alliance News) - Stock prices in Europe traded higher on Tuesday, despite some mixed updates on a Russia-Ukraine ceasefire, while worries stemming from a US credit rating downgrade are set aside for now.
The FTSE 100 index traded up 41.03 points, 0.5%, at 8,740.34. The FTSE 250 was up 59.53 points, 0.4%, at 21,020.62, and the AIM All-Share was up 1.09 points, 0.2%, at 734.65.
The Cboe UK 100 was up 0.6% at 872.46, the Cboe UK 250 was 0.5% higher at 18,387.76, and the Cboe Small Companies was also up 0.5%, trading at 15,985.73.
The CAC 40 in Paris and Frankfurt's DAX 40 each added 0.4%.
"Market sentiment remains shaped mainly by optimism around the US-China trade truce and renewed hopes for progress toward peace in the Russia–Ukraine conflict," ActivTrades analyst Ricardo Evangelista commented.
US President Donald Trump has said Russia and Ukraine will "immediately" begin ceasefire negotiations after what he described as an "excellent" call with Russian President Vladimir Putin that lasted more than two hours.
Trump also spoke to Ukrainian leader Volodymyr Zelensky and European leaders in the hope of making progress toward a ceasefire.
"The conditions for that will be negotiated between the two parties, as it can only be, because they know details of a negotiation that nobody else would be aware of," Trump said in a social media post.
It was not clear when or where any talks might take place or who would participate.
Zelensky accused Russia of not seriously engaging in peace talks, however, and of wanting to continue its three-year invasion.
"It is obvious that Russia is trying to buy time in order to continue its war and occupation," Zelensky said in a post on social media.
The yield on the US 10-year Treasury was quoted at 4.46% early Tuesday afternoon UK time, narrowing from 4.49% at the time of the London equities close on Monday. The yield on the US 30-year Treasury slimmed to 4.93% from 4.96%.
Stocks in New York are called to open lower on Tuesday, after recovering from a slow start to Monday to end higher.
The Dow Jones Industrial Average is called to open fractionally lower, the S&P 500 down 0.3% and the Nasdaq Composite 0.4% lower.
AJ Bell analyst Russ Mould commented: "The downgrade to the US credit rating from agency Moody’s and fears about the impact on an already-large deficit of a package of tax cuts making its way through Congress had resulted in a weak start on Wall Street. However, investors soon shrugged off the news to buy the dip and extend a recent winning streak for the S&P 500.
"Suggestions this rally was largely driven by retail investor flows raises the question of whether institutions will join in with the buying – something which is probably required if the buying is to be sustained."
Sterling faded to USD1.3357 early on Tuesday afternoon, from USD1.3365 at the time of the London equities close on Monday. The euro was weaker at USD1.1243 from USD1.1254. Against the yen, the dollar faded to JPY144.58 from JPY144.85.
The pound and euro returned some earlier gains on the dollar. The pound was on the cusp of the USD1.34 mark earlier Tuesday, hitting an intraday high of USD1.3394. The euro had traded as high as USD1.1277.
The Bank of England has been cutting interest rates too quickly, its chief economist has warned.
Huw Pill said the pace of interest rate reductions since August last year has been "too rapid" given the balance of risks to UK inflation.
Speaking at an event held at Barclays in London, he said progress of "disinflation" was partly a signal that easing monetary policy – meaning rates coming down – was working.
"And in my view, that withdrawal of policy restriction has been running a little too fast of late, given the progress achieved thus far with returning inflation to target on a lasting basis."
In London, Diploma was the top FTSE 100 performer. It jumped 18% on a guidance raise and strong results.
The supplier of specialised technical products and services said pretax profit in the half-year to March 31 surged 57% to GBP122.3 million from GBP77.8 million a year earlier.
Revenue climbed 14% to GBP728.5 million from GBP638.3 million, with organic revenue picking up to 9% from 5% a year prior.
Diploma now expects full-year organic revenue growth of 8%, its guidance lifted from 6%, and an operation margin of around 22%, the outlook upped from roughly 21%.
Analysts at Stifel commented: "This is clearly a strong and reassuring update from Diploma."
Greggs added 6.5%, the best of the FTSE 250s. The baker said total sales in the first 20 weeks of the year rose 7.4% annually to GBP784 million. Like-for-like sales were 2.9% higher, with an "improved performance in the last 11 weeks supported by better trading conditions".
It said "product innovation" has played a part in its sales rise. The FTSE 250 listing hailed its over-ice drinks range, which includes iced tea and lemonade. It also said "pizza boxes continue to see strong demand".
Among some of its "classic product ranges", there have also been some more "innovation".
"We have made recipe enhancements to our sandwich range in recent weeks, as well as introducing a new feta, red pepper and spinach bake to our iconic savoury range," it added.
The stock is still down by around a quarter over the past 12 months.
Renold confirmed it has received two separate all-cash takeover proposals from private equity firms. Shares jumped 41%, giving it a market capitalisation of GBP173.1 million.
The latest versions of the two proposals were for 81 pence per share and 77p, respectively, Renold said.
The supplier of industrial chains and related power-transmission products said the two separate takeover proposals were unsolicited and non-binding.
One is from a consortium of Buckthorn Partners and One Equity Partners. The other is from Webster Industries, which is majority owned by a fund managed and controlled by Morgenthaler Private Equity. The consortium's latest proposal is 81p per share, while Webster's is 77p. Each of these followed "several previous proposals", Renold said.
Gold slipped to USD3,234.71 an ounce early Tuesday afternoon from USD3,233.73 at the time of the London equities close on Monday. A barrel of Brent bought USD65.39, flat from USD65.41.
Over in New York, focus will be on updates from retail names this week. TJX, the owner of the TX Maxx and TK Maxx chains, and Ross Stores among those reporting.
Home Depot got the ball rolling by reaffirming its full year guidance and reporting higher sales in the first quarter.
The Atlanta, Georgia-based home improvement retailer said net sales grew 9.4% to USD39.86 billion in the three months to the end of May from USD36.42 billion a year ago.
In the same period, net earnings were down 4.6% to USD3.43 billion from USD3.60 billion.
The stock rose 2.1% in pre-market dealings in New York.
Retail will be in focus in the UK, with numbers from Marks & Spencer Group and JD Sports on the docket on Wednesday.
Still to come on Tuesday is a eurozone consumer confidence reading at 1500 BST.
By Eric Cunha, Alliance News news editor
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