27th May 2025 09:10
(Alliance News) - London opened in the green on Tuesday ahead of a bank holiday-shortened week, as Russia hits out at the lifting of Ukraine's range limits by its Western allies and suggests US criticism of the Kremlin is down to "emotional overload".
The FTSE 100 index opened up 73.85 points, 0.9%, at 8,791.82. The FTSE 250 was up 200.50 points, 1.0%, at 20,909.22, and the AIM All-Share was up 3.06 points, 0.4%, at 739.10.
The Cboe UK 100 was up 0.1% at 875.80, the Cboe UK 250 was up 1.1% at 18,391.26, and the Cboe Small Companies was marginally higher at 16,593.79.
"The FTSE 100 has enjoyed five consecutive weeks of gains, and the FTSE 250 has added 1,000 points over the last month. But domestic equities have not been popular with investors in recent years. For most of the past decade, stretching back to 2016, investors have sold more UK equities than they’ve bought, and not by a small margin," commented Hargreaves Lansdown analyst Joseph Hill.
"The pain has arguably been felt most acutely in the smaller companies sector. Fund managers have had to continually sell undervalued holdings to meet redemptions from investors. This downward pressure on stock prices has seen UK equity valuations trading at well below their long run averages, and particularly in small cap."
UK shop prices deflation was unchanged this month, but food inflation increased, data published by the British Retail Consortium revealed. Shop prices declined by 0.1% on an annual basis in May, the BRC said, the same pace of decline as in April.
Conversely, the food inflation rate was 2.8% on-year, accelerating from 2.6% in April. Fresh food price inflation rose to 2.4% on-year in May, suddenly accelerating from growth of 1.8% in April. Ambient food inflation, however, eased to 3.3% on-year from 3.7%.
In European equities on Tuesday, the CAC 40 in Paris rose 0.1%, while the DAX 40 in Frankfurt improved 0.2%.
The pound was quoted up at USD1.3539 early on Tuesday in London, compared to USD1.3509 at the equities close on Friday. The euro stood higher at USD1.1353, against USD1.1348. Against the yen, the dollar was trading up at JPY143.59 compared to JPY142.70.
Elementis was the leading riser on FTSE 250 on Tuesday morning, up 13%.
The London-based specialty chemicals company has agreed and completed the sale of its Talc business to global talc manufacturer IMI Fabi for an enterprise value of USD121 million. Net cash proceeds after expenses are around USD55 million.
The disposal follows the firm's strategic review of the Talc business in August 2024, and will improve Elementis' adjusted operating profit margin by around 240 basis points. The sale will also accelerate the delivery of the group's 2026 financial targets, Elementis added.
As a result, Elementis intends to return USD50 million to shareholders via a share buyback programme, which it expects to launch "as soon as possible". The firm left its full-year outlook and progressive dividend policy unchanged.
At the other end, Hochschild Mining was the FTSE 250's biggest loser, down 4.1%.
The London-based gold and silver miner in Argentina, Brazil and Peru said its Chief Operating Officer Rodrigo Nunes has stepped down with immediate effect, for an undisclosed reason, following his 2023 appointment.
Chief Executive Officer Eduardo Landin has assumed responsibility for the firm's operations on an interim basis while the company completes the process of recruiting a new COO.
React Group faded 20%.
The Birmingham, England-based provider of cleaning and soft facilities management services swung to an operating loss of GBP116,000 in the six months that ended March 31, from a GBP308,000 profit the year before.
This was despite revenue growing 14% to GBP12.1 million from GBP10.6 million, as administrative expenses increased 34% to GBP3.9 million from GBP2.9 million and cost of sales rose 6.5% to GBP8.2 million from GBP7.7 million.
"The board is taking a more cautious approach with respect to the expected outturn for the current financial year but firmly believes that React is well positioned to capitalise on an improvement in the economy," said Chief Executive Officer Shaun Doak.
Metals One shed 13%.
The London-based metal project developer said it was "well-positioned" to benefit from the nuclear energy-related executive orders signed by US President Donald Trump on Friday, to allow the Departments of Energy & Defense to build nuclear reactors on federally owned land and overhaul the Nuclear Regulatory Commission.
This will reportedly speed up reactor testing and boost the US's mining and enrichment of uranium.
"These executive orders to support uranium production and advanced nuclear technologies are fully aligned with Metals One's strategic entry into US uranium exploration. With phase 1 exploration already underway, we are well positioned to contribute to the next generation of domestic nuclear supply and energy resilience," said Metals One Chair Craig Moulton.
In Asia on Tuesday, the Nikkei 225 index in Tokyo improved 0.5%. In China, the Shanghai Composite shed 0.2%, while the Hang Seng index in Hong Kong rose 0.5%. The S&P/ASX 200 in Sydney closed up 0.6%.
The Kremlin suggested that US President Donald Trump's harsh criticism of President Vladimir Putin is down to "emotional overload," amid uncertainty over the status of negotiations to try and end the war in Ukraine.
The prospect of negotiations is "connected, of course, with emotional overload of absolutely everyone and with emotional reactions," Kremlin spokesman Dmitry Peskov was quoted as saying by the Russian state news agency TASS. He rejected Trump's criticism of the mass bombardment of Ukraine over the past three nights, arguing that Putin was "making the decisions that are necessary to ensure the security of our country."
The Kremlin also said that any Western decision to lift range limits on arms delivered to Ukraine would be "dangerous", after Germany announced that Kyiv's allies were no longer imposing restrictions.
"If these decisions have indeed been made, they are completely at odds with our aspirations for a political [peace] settlement... These are quite dangerous decisions, if they have been made," Kremlin spokesman Dmitry Peskov told Russian journalist Alexander Yunashev.
In the US on Friday, Wall Street ended lower, with the Dow Jones Industrial Average fading 0.6%, the S&P 500 losing 0.7% and the Nasdaq Composite falling 1.0%.
The yield on the US 10-year Treasury was quoted at 4.46%, narrowing from 4.51%. The yield on the US 30-year Treasury was quoted at 4.96%, narrowing from 5.04%.
Meanwhile, Nato members are expected to agree to raise their defence expenditure to 5% of economic output, according to Secretary General Mark Rutte. A new target is set to be agreed at the Nato summit in the Dutch city of The Hague in June.
"We need this, because otherwise we will never, ever achieve the capability goals we need to achieve," Rutte told the Nato Parliamentary Assembly in Dayton, Ohio.
According to the Nato head, of that, significantly more than 3% would go towards traditional defence spending - internal documents mention 3.5%. The rest could go towards defence-related spending, such as military infrastructure, including railway lines, tank-compatible bridges and expanded ports.
At the same time, the EU remains committed to reaching a trade agreement with the US, Trade Commissioner Maros Sefcovic said following calls with US officials on Monday.
Sefcovic, in a post on the social media platform X, said that he had "good calls" with US Secretary of Commerce Howard Lutnick and Trade Representative Jamieson Greer, adding that the EU Commission will "stay in constant contact" with the US.
Brent oil was quoted down at USD63.86 a barrel early in London on Tuesday from USD64.71 late Friday.
Gold was quoted lower at USD3,307.54 an ounce against USD3,356.90.
Still to come on Tuesday's economic calendar, eurozone consumer confidence; CBI distributive trades from the UK; and the Redbook and house price indices from the US.
By Emily Parsons, Alliance News reporter
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