The FTSE 100 rose on Tuesday as cyclical shares provided a boost to the index amid hopes of a deal in the Middle East.
London’s leading index was trading 0.9% and higher at the time of writing.
“There’s been cautious optimism unfolding on the Footsie in early trade as investors assess the likelihood of Middle East peace talks progressing and digest relatively stable UK growth figures,” Susannah Streeter, Chief Investment Strategist, Wealth Club.
“Brent crude has inched down again, a measure of hope that negotiations will advance, even though the situation remains somewhat unpredictable. Control of the Strait of Hormuz is set to remain a sticking point in discussions amid concerns that tolls could be imposed after the 60-day free-transit grace period has expired.”
The cautious option described was most felt in cyclical shares, including mining shares and US technology-focused investment trusts.
Higher metals prices translated into higher share prices for the FTSE 100’s miners. Antofagasta was the top riser at the time of writing, gaining 3.9%.
Anglo American was not far behind, ticking up by 3.6%.
There was a notable increase in technology-focused investment trusts, including Scottish Mortgage and Polar Capital Technology Trusts, which reacted well to a recovery in the world’s largest technology companies after a tough couple of weeks.
Scottish Mortgage’s 17% weighting in SpaceX led to a bout of volatility, but a 7% jump for SpaceX yesterday has helped stabilise Scottish Mortgage.
Polar Capital’s more diversified and dedicated approach to picking AI leaders means the trust’s share price is up over 50% since the start of the year, and investors seem to be using last week’s dip as an opportunity to buy into the stock.
Sainsbury’s was the standout corporate story on Tuesday, with a trading statement showing progress against tough comparables.
“Sainsbury’s is finding life a little harder as first quarter sales growth slows. It reported 2.1% like-for-like sales growth versus 4.7% in last year’s comparative period,” explained Dan Coatsworth, head of markets at AJ Bell.
“It’s not disastrous and the grocer is still striking a chord with both cost-conscious individuals and shoppers happy to spend a bit more on fancy items. Online grocery sales were notably strong, and Sainsbury’s continues to find ways to improve the in-store shopping experience.”
Sainsbury’s shares were 2% higher at the time of writing.