The FTSE 100 tiptoed higher again on Tuesday and was set to reach another record high amid hopes of a US interest rate cut this week.
The gains, however, were meagre compared to a rally in the US overnight, which saw the S&P 500 close over 1.2% as tech shares soared. S&P 500 futures were flat going into the open.
London’s leading index was just 4 points higher at the time of writing at 9,658.
Investors globally had a spring in their step ahead of the Federal Reserve’s interest rate decision tomorrow and were also buoyed by progress in US-China trade relations.
“There are hopes that trade relations between Washington and Beijing can thaw when Presidents Donald Trump and Xi Jinping meet in South Korea later this week,” explained Derren Nathan, head of equity research, Hargreaves Lansdown.
“Trade deal progress has been difficult but successful discussions could pave the way for lighter export restrictions on advanced technology to China, as well as preventing proposed Chinese tariffs on rare-earth minerals that are essential for semiconductor fabrication. Meanwhile, markets are all-but-certain of a quarter point cut by the Federal Reserve Bank tomorrow, and confidence in another similar cut in December is high.”
HSBC was among the risers in London after the bank announced revenues that beat expectations and increased income guidance. The positivity around HSBC’s underlying performance offset the hit from provisions relating to the Madoff Ponzi scheme, and shares rose more than 3%.
“HSBC’s latest results show solid progress toward its 2027 goals, proving the bank can still deliver despite legacy headwinds, with a 14% drop in pre-tax profit linked to the Madoff Ponzi scheme,” said Max Harper, Analyst at Third Bridge.
“Revenue beat consensus expectations by 5.9%, with strength across both net interest income and fees. The $1 billion upgrade to NII guidance should be well received, reflecting how the bank’s streamlined operating model is driving greater efficiency and returns.”
Airtel Africa was the FTSE 100’s top riser, surging more than 6%, after half-year revenue rose more than 25%. Operating profits jumped 35% as customer numbers rose sharply over the period.
The biggest detractors from the positivity in London were the housebuilders and UK retailers, which were showing signs of budget jitters.