Global stock markets rally on global optimism

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Global stock markets rallied on Tuesday in a wave of optimism that propelled the pound to two-week highs.

The FTSE 100 in London climbed back above 7,000 as a 178 point rise left it at 7,086 points.

The 2.6% rise was the index’s best performance since June, but it is still far from recent highs after a sell-off triggered by the government’s mini-budget.

The pound continued its rebound from its recent malaise, hitting a high near $1.145 on the day. Shortly after markets closed in London, it was up more than 1% on the day.

“The pound continued its upward trajectory as concerns ease as gilt markets continue to cool,” said Joshua Mahony, senior market analyst at online trading platform IG.

“While markets appear to have reacted positively to the Chancellor’s 45p tax rate reversal, today saw (Kwasi) Kwarteng flip-flop once again by returning to his original stance that the government’s forecast ‘OBR (Office for Budget Responsibility) will only arrive at the end of November.

“Although the pound has gained ground against the dollar, this largely reflects a broader improvement in risk sentiment.”

The FTSE rose on the day, but it underperformed its European neighbors.

In France, the Cac 40 closed up 4.2% while the German Dax index rose 3.8%.

In New York, the S&P 500 was trading up 2.8% and the Dow Jones up 2.6% shortly after markets closed in Europe.

Shares of Greggs soared more than a tenth on Tuesday as the company revealed sales were soaring as customers sought cheaper lunches.

The company said sales increased 15% over the past three months.

“I think people just want to look for good value,” said general manager Roisin Currie.

“So if our customers are worried about the cost of living, whether they’re traveling, at work or with friends and they’re hungry, they come to us for a bargain.”

Greggs has raised the price of its sausage rolls for the third time this year, to £1.15 – up from £1 at the end of 2021.

The biggest risers on the FTSE 100 were Flutter Entertainment, up 896p at 10,590p, Ocado, up 41.3p at 507p, Intermediate Capital Group, up 83.7p at 1,083.5p, IAG, in up 7.4p to 101.06p, and Hargreaves Lansdown, up 63p to 922.6p.

The biggest decliners were Centrica, down 0.66p to 71.4p, SSE, down 13p to 1,560p, Aveva, down 12p to 3,167p, British Land, down 1p to 354.5p , and Segro, down 3p to 754p.

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