London close: Stocks rise on buoyant global sentiment

London stocks enjoyed a day of robust gains, closing significantly higher on Tuesday following a strong performance from Asian markets.

The FTSE 100 rose 1.72% to close at 7,464.99 points, while the FTSE 250 posted a more considerable gain of 1.86% to end at 18,468.59 points.

Housebuilders were at the forefront of the market's upward momentum, pacing the day's gains.

Asian markets rallied for the second consecutive day overnight, buoyed by strategic measures introduced by China to stimulate its stock markets, including a reduction in stamp duty and a loosening of margin loan rules.

In currency markets, sterling was last up 0.12% on the dollar to trade at $1.2617, while it lost 0.17% against the euro to change hands at €1.1628.

“China's announcement of a 50% stamp duty cut in share dealing and other stimulus measures over the UK bank holiday helped lift global stock indices on Tuesday,” said IG senior market analyst Axel Rudolph.

“Japan's stronger-than-expected unemployment rate at 2.7% and that its government said that it may be at an inflection point in its 25-year battle with deflation did not dampen the mood.

“Neither did unexpectedly low German consumer morale.”

Mixed economic indicators from UK inflation to US consumer confidence

In economic news, UK shop price inflation registered its lowest level in almost a year, as the BRC-Nielsen shop price index, which tracks price fluctuations for 500 commonly purchased items, fell to 6.9% in August, down from 7.6% in July.

That marked the lowest rate since October last year.

Central to the decline was a decrease in food inflation, especially in staples like meat, potatoes, and some cooking oils, which dropped from 13.4% to 11.5%.

The easing inflation would come as a relief to the Bank of England, which was still grappling with persistently high inflation rates.

“These figures would have been lower had the government not increased alcohol duties earlier this month,” said BRC chief executive Helen Dickinson.

“Across non-food categories, toiletries and cosmetics saw price growth ease as many key components became cheaper, meanwhile inflation for clothing and footwear increased as retailers unwound their extensive summer sales.”

Across the channel in Germany, consumer sentiment took a hit, primarily due to high inflation.

Market research firm GfK reported that its forward-looking consumer sentiment index for September dropped to -25.5 from -24.6 in August, falling short of market expectations.

Income expectations also saw a decline, adding to concerns about consumer spending in the coming months.

Across the Atlantic, US consumer confidence took an unexpected dip, declining from a revised 114 in July to 106.1 in August, according to the Conference Board.

That defied market expectations and was put down to worries over rising prices and possible future hikes in interest rates.

Meanwhile, house prices in the US showed resilience, growing 0.9% in June according to the S&P/Case-Shiller 20-city house price index.

Despite that, the year-on-year data showed a 1.2% decrease in house prices.

Adding complexity to the US economic landscape, the number of job openings dropped in July, falling to 8.827 million from 9.165 million in June, according to the Bureau of Labor Statistics.

That made for the lowest figure since March 2021 and falls below economists' expectations.

Housebuilders lead equity gains on relaxed planning rules

On London’s equity markets, housebuilding firms took the spotlight with shares surging on news that the government would be relaxing planning rules.

Persimmon was up 4.99%, Barratt Developments added 4.06%, Taylor Wimpey rose 3.75%, Crest Nicholson Holdings jumped 7.35%, and Vistry Group closed 2.41% firmer.

Elsewhere, distribution specialist Bunzl saw its stock climb 3.12% after the company announced an upward revision of its annual adjusted operating profit guidance.

The firm also reported increased half-year earnings.

“We now expect adjusted operating profit to be moderately higher than in 2022 at constant exchange rates, with operating margin remaining strong and moderately higher than that achieved in the prior year,” the firm said.

Finally, drinks company Britvic found itself in favourable territory, with its stock rising 3.51% after Barclays upgraded the company's rating to ‘overweight.’

“In the wake of Covid and inflation disruption to the implementation of Britvic's new growth strategy, we now see headwinds clearing and identify multiple top-line and margin drivers that can deliver accelerated growth,” the bank noted.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,464.99 1.72%
FTSE 250 (MCX) 18,468.59 1.86%
techMARK (TASX) 4,291.77 1.48%

FTSE 100 - Risers

Ocado Group (OCDO) 782.20p 5.45%
Persimmon (PSN) 1,039.00p 5.27%
Smith (DS) (SMDS) 308.20p 5.12%
Rolls-Royce Holdings (RR.) 212.90p 4.88%
Johnson Matthey (JMAT) 1,615.50p 4.70%
Smurfit Kappa Group (CDI) (SKG) 3,288.00p 4.45%
JD Sports Fashion (JD.) 144.65p 4.35%
Antofagasta (ANTO) 1,461.50p 4.28%
Kingfisher (KGF) 236.60p 4.18%
Barclays (BARC) 149.96p 4.15%

FTSE 100 - Fallers

Haleon (HLN) 326.60p -0.35%
B&M European Value Retail S.A. (DI) (BME) 565.40p -0.32%
Pershing Square Holdings Ltd NPV (PSH) 2,988.00p -0.13%
Compass Group (CPG) 2,017.00p -0.10%
London Stock Exchange Group (LSEG) 8,200.00p 0.22%
Imperial Brands (IMB) 1,781.50p 0.56%
Unilever (ULVR) 4,061.00p 0.61%
Pearson (PSON) 838.60p 0.70%
British American Tobacco (BATS) 2,611.00p 0.85%
Entain (ENT) 1,166.00p 0.87%

FTSE 250 - Risers

Quilter (QLT) 88.05p 7.71%
Crest Nicholson Holdings (CRST) 182.60p 7.41%
Digital 9 Infrastructure NPV (DGI9) 57.60p 6.27%
Synthomer (SYNT) 67.20p 5.74%
CMC Markets (CMCX) 116.20p 5.44%
Watches of Switzerland Group (WOSG) 577.00p 5.20%
HGCapital Trust (HGT) 385.50p 5.18%
Coats Group (COA) 75.50p 4.86%
Mobico Group (MCG) 79.05p 4.84%
Aston Martin Lagonda Global Holdings (AML) 354.00p 4.73%

FTSE 250 - Fallers

Caledonia Investments (CLDN) 3,305.00p -2.51%
North Atlantic Smaller Companies Inv Trust (NAS) 3,480.00p -2.25%
Hammerson (HMSO) 24.04p -1.39%
SDCL Energy Efficiency Income Trust (SEIT) 75.10p -0.92%
Energean (ENOG) 1,111.00p -0.89%
ICG Enterprise Trust (ICGT) 1,046.00p -0.76%
Twentyfour Income Fund Limited Ord Red (TFIF) 98.20p -0.61%
Chemring Group (CHG) 288.00p -0.52%
Barr (A.G.) (BAG) 486.00p -0.51%
Drax Group (DRX) 556.80p -0.50%