The FTSE 100 was little changed on Tuesday having been in both significantly negative and positive on the day.
The FTSE 100 was trading at 7,017, down just 3 points at the time of writing.
Markets have been assessing the impact of a sinking pound and the prospect of dramatic increases in UK rates causing severe volatility in UK assets.
However, Tuesday saw the pound gain against the dollar and equities stabilise.
“It felt like the calm after the storm on Tuesday morning as sterling stabilised and the FTSE 100 made modest progress,” said AJ Bell investment director Russ Mould.
Miners rally
Mining stocks were among the top performers on the FTSE 100 on Tuesday as the promise of increased demand for natural resources in China helped lift the sector.
“Hopes that tough Covid restrictions could soon be in China’s rear view mirror have helped lift sentiment that one of the key roadblocks to a global recovery could be removed,” said Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdow.
“Strict curbs have lifted in Hong Kong and there is growing expectation that Beijing will change direction on its zero-Covid strategy and open up the country by Spring next year to boost employment and incomes, which have been suffering due to rolling lockdowns.”
“These glimpses of light at the end of what’s been a gloomy tunnel in China have helped lift commodity giants in early trade in London with Anglo America and Rio Tinto among the top risers on the FTSE100, amid hopes of higher demand for metals.”
Housebuilders drop
Housebuilders were again under pressure as a number of UK Banks and Building Societies pulled mortgages from the market due to uncertainty around rates.
If lenders are unable to forecast base interest rates, it makes issuing mortgage rates so difficult that they decide to pull them from the market.
A housing market without an adequate supply of mortgages will likely slow over time.
Taylor Wimpey traded at the lowest level since 2013 on Tuesday as investors digested the news.