Markets end day higher amid positive noises between US and China
European markets ended the day in the green as their cousins across the pond shrugged off unrest in cities across the US.
The FTSE 100 closed Tuesday up 0.9%, or 53.72 points, to 6220.14.
Meanwhile, the FTSE’s counterparts on the continent fared even better. Coming back after a bank holiday weekend, Germany’s Dax ended the day 3.8% higher, while the French Cac 40 index was up 2%.
It comes as the two main US indices fared well despite demonstrations over the death of African American George Floyd in police custody.
The S&P 500 was up 0.25%, while the Dow Jones Industrial Average had gained 0.6% at the end of the trading day in Europe.
Investors allowed hopes over positive noises between Washington and Beijing to outshine worries over the protests.
“Stock markets in Europe have posted decent gains for a second day in a row as a slight thawing of US-China trade relations, combined with hopes surrounding the easing of lockdown restrictions, has boosted equity sentiment,” said CMC Markets analyst David Madden.
“It was reported last night that Chinese state-controlled companies placed orders to purchase agricultural goods from the US.
“The purchases send out a positive message that the two largest economies in the world are still trading, despite the rising tensions in relation to Hong Kong.”
Steps to reopen economies from coronavirus lockdown are likely also causing sentiment to remain higher.
The FTSE 100 has been slowly ticking up since the end of March when lockdown began in the UK, after taking a major beating in the weeks before.
But Bill Blain, market strategist at Shard Capital, warned that the market is not reflecting the economy.
“Some will try and take positives from the small move in the FTSE, but the widening disconnect between markets and the economy is not healthy,” he said.
“While the FTSE and other global markets continue to grind higher, the outlook for growth and jobs continues to deteriorate.
“Many investors still seem blind to the devastating potential of crisis in jobs, growth, welfare and inequality the apparent recovery in stocks is hiding.”
The price of a barrel of Brent crude oil rose 2.5% to 39.28 US dollars at around market close in London.
At the end of the day, the pound was up 0.3% against the dollar to 1.253, and less than 0.1% against the euro to 1.1223.
In company news, Tesco’s shares ended the day down 1.2% after finance boss Alan Stewart revealed plans to retire from the supermarket.
Chief executive Dave Lewis has previously said he will leave in September.
Retailer Card Factory plummeted 9.3% on the exchange after it cancelled dividends and said it would only reopen 10% of its shops to begin with. The business aid that online sales surged by 302% during lockdown.
EasyJet shares rose 2.6% on the news that it will resume flights on half its routes by the end of next month. The airline had grounded its entire fleet during the Covid-19 pandemic.
Retirement home firm McCarthy & Stone got a 3.2% bump after announcing that construction will begin again on its sites, and its sales offices will reopen from next week.
Carnival’s share price dropped by 1% after subsidiary P&O Cruises extended the suspended all sailings until mid-October, after originally announcing cancellations through until the end of July.
The biggest risers on the FTSE 100 were Meggitt, up 26.6p to 312.7p, British Land, up 34p to 441p, Melrose Industries, up 9.4p to 128.9p, Land Securities, up 37.2p to 655.4p, and BP, up 17.6p to 328.6p.
The biggest fallers on the FTSE 100 were Hargreaves Lansdown, down 83p to 1,748.5p, Hikma, down 68p to 2,425p, Ocado, down 57p to 2,172p, Aveva, down 79p to 3,956p, and Fresnillo, down 15.8p to 793.6p.