The FTSE 100 surged on Tuesday in the first trading session after the Bank Holiday as the index played catch-up with a strong session for global equities yesterday.
China moved to support their domestic equity market by cutting levies on trading over the weekend, which resulted in a sharp jump in Chinese stocks that rippled through global equities on Monday.
In addition, the absence of any negative fallout from the Jackson Hole Symposium helped boost sentiment and US and European equities gained even as the Chinese stock market rally faded.
The FTSE 100 was 1.4% higher at the time of writing on Tuesday.
“The market may have been underwhelmed by China’s initial efforts to restore confidence, but that doesn’t seem to be the case with the latest measures, which have given Chinese and global stocks a real boost,” said AJ Bell investment director Russ Mould.
“Whether the medicine Beijing is doling out will deal with the causes rather than just the symptoms of its economic challenges is debatable, but for the time being it is at least doing enough to restore sentiment.
“The lack of any big shocks in US Federal Reserve chair Jerome Powell’s Jackson Hole speech also seems to have helped create the conditions for a late summer rally.”
FTSE 100 movers
The FTSE 100 gains were broad on Tuesday, with 98 of the 100 constituents in positive territory shortly after 2pm.
Persimmon was the top riser, gaining 4% after the Department for Levelling Up, Housing & Communities said they would ease water pollution regulations that would help push through the construction of an additional 100,000 homes.
Taylor Wimpey and Barratt Developments joined the action with gains of 2.7% and 3.8%, respectively.
Bunzl was among the gainers after their revenue edged higher and margins increased despite ongoing inflationary pressures.
Positive sounds from China helped Prudential higher with an increase of 3.8%.