5th Aug 2025 08:50
(Alliance News) - European stocks opened higher on Tuesday, continuing their recovery after last week's sell-off, ahead of a US trade balance reading and purchasing managers' index releases.
The FTSE 100 index opened up 23.72 points, 0.3%, at 9,152.02. The FTSE 250 was up 85.42 points, 0.4%, at 21,944.92, and the AIM All-Share was up 5.55 points, 0.7%, at 764.44.
The Cboe UK 100 was up 0.3% at 915.50, the Cboe UK 250 was up 0.4% at 19,294.51, and the Cboe Small Companies was marginally higher at 17,353.15.
In European equities on Tuesday, the CAC 40 in Paris was up 0.3%, while the DAX 40 in Frankfurt was 0.6% higher.
"The week kicked off on a positive note as investors rushed to buy the dips from last week's correction. While the European indices remain under the pressure of tariffs, there are now two distinct camps regarding whether the major US indices should return to fresh all-time highs or whether a further correction is in order," commented Swissquote analyst Ipek Ozkardeskaya.
"The bullish camp argues that earnings have been stronger than expected, and that rising rate cut prospects from the Federal Reserve (Fed) are sufficient to send major US indices to fresh records – with optimism potentially echoing across global financial markets.
"The bearish camp hears these arguments but highlights that strong US earnings were partly due to a softer dollar; that while technology companies eked out a 26% increase in profits, the rest of the market posted just 4% growth; and that rate cuts are not necessarily justified – even with a deteriorating economic outlook – while inflation remains hot and at risk of further rising, especially as some companies have announced they will be passing part of the tariff costs onto clients."
In the US on Monday, Wall Street ended higher, with the Dow Jones Industrial Average gaining 1.3%, the S&P 500 improving 1.5% and the Nasdaq Composite jumping 2.0%.
The yield on the US 10-year Treasury was quoted at 4.21%, narrowing from 4.22%. The yield on the US 30-year Treasury was quoted at 4.80%, trimmed from 4.81%.
Ozkardeskaya continued: "Investors will be watching the ISM and PMI data today. Softer-than-expected figures could further fuel dovish Fed expectations and support equity valuations – despite rising price pressures – while stronger-than-expected data will likely do little to reverse expectations for a September cut. On the contrary, any bright spot would support the idea that the US economy is holding up well despite tariffs."
Smith & Nephew led the FTSE 100 at London's market open, up 12%.
The Watford, Hertfordshire-based medical technology company reported pretax profit of USD362 million for the six months that ended June 28, rising 43% from USD253 million the year before. Revenue grew 4.6% to USD2.96 billion from USD2.83 billion. The firm lifted its interim dividend to 15.0 US cents per share, up 4.2% on-year from 14.4 cents.
Smith & Nephew left its full-year guidance unchanged, anticipating underlying revenue growth of around 5.0% and reported growth at around 5.5%. Trading profit margin is expected to expand to between 19% and 20%. The firm also announced a share buyback programme for USD500 million, to start on Tuesday and run until December 31.
Cap-XX rose 22%.
The Sydney-based designer and manufacturer of supercapacitors and energy management systems said it has secured a design-in project with an unnamed company it calls "one of the world's largest semiconductor chip manufacturers". Cap-XX's supercapacitor technology will be integrated into high-temperature electric chambers used in semiconductor fabrication.
"This is an exciting validation of our technology by a global industry leader," said Cap-XX Chief Executive Officer Lars Stegmann. "Our ability to deliver high-performance energy solutions in challenging conditions continues to set us apart. We look forward to expanding this relationship and driving further adoption of CAP-XX supercapacitors in high-value industrial applications."
At the other end, Domino's Pizza tumbled 19%.
The Milton Keynes, England-based pizza brand said pretax profit for the 26 weeks that ended June 30 fell 32% to GBP40.5 million from GBP59.4 million the year before, on revenue growth of 1.4% to GBP331.5 million from GBP326.8 million. The company declared an interim dividend of 3.6 pence per share, up 2.9% on-year from 3.5p.
Domino's Pizza lowered its full-year guidance for underlying earnings before interest, tax, depreciation and amortisation as a result of "weak consumer sentiment", with flat on-year orders, and lower than expected store openings, bringing its 2025 forecast to between GBP130 million and GBP140 million. Underlying Ebitda in the first half declined 7.4% to GBP63.9 million from GBP69.0 million, against GBP143.4 million in underlying Ebitda reported for financial 2024.
"Despite these near-term challenges we remain confident in our strategy and the prospects for our resilient, market-leading business," said Chief Executive Officer Andrew Rennie. "That confidence is demonstrated by our decision to increase the interim dividend, and we also continue to assess a range of accretive growth opportunities." The firm expects new store openings in the mid-twenties for the full year.
The pound was quoted up at USD1.3293 early on Tuesday in London, compared to USD1.3287 at the equities close on Monday. The euro stood lower at USD1.1560, against USD1.1568. Against the yen, the dollar was trading slightly lower at JPY147.24 compared to JPY147.30.
In Asia on Tuesday, the Nikkei 225 index in Tokyo improved 0.6%. In China, the Shanghai Composite was 1.0% higher, while the Hang Seng index in Hong Kong gained 0.6%. The S&P/ASX 200 in Sydney closed up 1.2%.
Brent oil was quoted lower at USD68.28 a barrel early in London on Tuesday from USD69.20 late Monday. Gold was quoted slightly higher at USD3,374.13 an ounce against USD3,372.82.
Still to come on Tuesday's economic calendar, a slew of composite PMI readings, new car sales figures in the UK and trade balance data in the US.
By Emily Parsons, Alliance News reporter
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