The FTSE 100 jumped on Tuesday as UK stocks tracked a strong session for the US, where the NASDAQ closed at a record.
A global equity rally followed a slight easing of pressure from oil and the bond market, which sparked a minor pullback in the FTSE 100 last week.
Traders were happy to buy into the recent dip as these potential risks to global growth abate and the FTSE 100 surged 0.9% in early trade after the NASDAQ close at 27,477.31 – a fresh record closing high.
The FTSE 100 has posted early gains in several sessions recently, only to be sold into as the day progressed, so a true sign of improved sentiment will be if it can close in the region of 10,600 today. It had already started to fade by lunchtime.
“The FTSE 100 enjoyed broad-based gains, with only the energy sector in the red,” says Dan Coatsworth, head of markets at AJ Bell.
“Brent crude oil fell back below $100, much to the relief of the market. This gave a boost to interest-rate sensitive stocks including real estate and consumer cyclicals. Investors are praying that inflationary pressures start to ease off and central banks have less of a need to keep interest rates higher for longer.
“Borrowing costs eased on 10- and 30-year UK and US government bond yields, albeit remaining at elevated levels relative to the past decade or so.”
The improvement in the bond market filtered through to FTSE 100 stocks on Tuesday, with around 80 of the FTSE 100’s constituents trading higher at the time of writing.
Informa was the FTSE 100’s top riser after announcing it would become laser-focused on its events business through the acquisition of Clarion and the disposal of its academic arm.
“Informa is not alone in combining events with academic publishing, but its latest announcement suggests time is up on this arrangement,” Coatsworth explained.
“The events arm has benefited from a post-pandemic surge in demand, and management are looking to double down through the sizeable acquisition of rival Clarion and by spinning off its academic arm Taylor & Francis.
“The deal adds major events like the consumer electronics-focused IFA Berlin, gaming conference ICE in Barcelona and defence event DSEI to Informa’s roster. It is expected to accelerate growth and enhance earnings from next year.”
Informa is conducting a placing to fund the acquisition. Shares rose 3.2% on Tuesday.
Away from Informa, Weir Group rose 3%, and Croda added 2.7% as investors bought into industrials. Marks & Spencer was also among the best performers as easing inflation concerns helped consumer stocks.
A day after announcing diversification into Canadian assets, Ithaca Energy was the FTSE 100’s top faller as oil prices fell. BP and Shell were also lower.