London open: FTSE gains as sterling steadies after record lows

At 0845 BST, the FTSE 100 was up 0.6% at 7,063.34, while the pound was 1.1% firmer against the dollar at 1.0807, having fallen to its lowest level against the greenback since 1971 on Monday.

Oanda analyst Craig Erlam said: "Stock markets have steadied in Asia and early European trade on Tuesday but that is not reflective of the mood in the markets at the moment so it may struggle to hold.

"The volatility in FX markets at the start of the week has been extreme but it's also been building for weeks as authorities desperately try to arrest the decline in their currencies, particularly against the US dollar.

"On Monday it was the UK that was front and centre following the mini-budget on Friday that showed total disregard for the environment in which it was being implemented. Promising much higher borrowing to fund huge tax cuts at a time of double-digit inflation that hasn't even peaked is beyond bold and the backlash is well underway.

"There's nothing wrong with being ambitious on the economy but timing is everything and when the cost is much higher interest rates, there won't be many winners and the economy simply won't see the benefit. The question now is whether the pressure both externally and from within will force a rethink in order to settle things down.

"The Bank of England did little to help. After speculation all day of an impending announcement, the central bank only sought to reassure markets that they stand ready to act but probably not until the next meeting in early November when it is armed with new macroeconomic projections. Needless to say, that reassured no one and sterling plummeted again after recovering amid the rumours of the announcement."

In equity markets, waste management firm Biffa surged to the top of the FTSE 250 after agreeing to be bought by private equity firm Energy Capital Partners (ECP) for around £1.3bn.

Travel food outlet operator SSP rallied after saying it still expects a return to pre-Covid levels of like-for-like revenue and core earnings by 2024.

On the downside, United Utilities slumped as it warned on profits after the water company was hit by lower consumption and higher costs.

JD Sports fell as it it was fined along with Glasgow Rangers football club and Elite Sports by the UK’s Competition and Markets Authority after being found guilty of price fixing on official merchandise.

Merchant bank Close Brothers lost ground after it posted a decline in full-year operating profit, with the Winterflood business hit by a slowdown in trading activity.

Outside the FTSE 350, over-50s specialist Saga tumbled after a profit warning.

Market Movers

FTSE 100 (UKX) 7,063.34 0.60%
FTSE 250 (MCX) 17,864.76 0.80%
techMARK (TASX) 4,204.08 0.31%

FTSE 100 - Risers

Ocado Group (OCDO) 572.20p 2.88%
International Consolidated Airlines Group SA (CDI) (IAG) 103.70p 2.41%
3i Group (III) 1,149.50p 2.36%
Smurfit Kappa Group (CDI) (SKG) 2,663.00p 2.31%
Burberry Group (BRBY) 1,692.50p 2.14%
WPP (WPP) 777.20p 2.10%
Schroders (SDR) 423.40p 2.07%
Associated British Foods (ABF) 1,312.00p 1.94%
Rio Tinto (RIO) 4,788.00p 1.92%
Hargreaves Lansdown (HL.) 886.20p 1.91%

FTSE 100 - Fallers

Admiral Group (ADM) 1,940.00p -4.43%
United Utilities Group (UU.) 917.60p -2.61%
BAE Systems (BA.) 796.00p -2.12%
SSE (SSE) 1,653.00p -1.08%
Convatec Group (CTEC) 210.00p -0.66%
National Grid (NG.) 982.40p -0.59%
M&G (MNG) 185.65p -0.54%
AstraZeneca (AZN) 9,883.00p -0.50%
Severn Trent (SVT) 2,437.00p -0.29%
Legal & General Group (LGEN) 241.70p -0.25%

FTSE 250 - Risers

Biffa (BIFF) 407.80p 28.32%
SSP Group (SSPG) 221.40p 4.58%
Dunelm Group (DNLM) 780.00p 4.28%
Marks & Spencer Group (MKS) 106.50p 3.40%
Virgin Money UK (VMUK) 136.30p 3.02%
Playtech (PTEC) 431.20p 2.96%
TUI AG Reg Shs (DI) (TUI) 138.25p 2.94%
ICG Enterprise Trust (ICGT) 989.00p 2.81%
ITV (ITV) 61.62p 2.77%
BlackRock World Mining Trust (BRWM) 577.00p 2.67%

FTSE 250 - Fallers

PureTech Health (PRTC) 209.00p -2.79%
888 Holdings (DI) (888) 110.50p -2.30%
ContourGlobal (GLO) 250.00p -1.96%
Close Brothers Group (CBG) 1,004.00p -1.86%
Redrow (RDW) 424.60p -1.30%
Direct Line Insurance Group (DLG) 187.95p -1.26%
Ferrexpo (FXPO) 126.90p -1.09%
Balanced Commercial Property Trust Limited (BCPT) 82.00p -1.09%
Warehouse Reit (WHR) 116.80p -1.02%
JPMorgan Japanese Inv Trust (JFJ) 449.00p -0.99%