Stocks in London closed mixed on Tuesday as oil prices edged lower again and investors looked for signs of a thawing in relations between the US and Iran.
The FTSE 100 index ended down 30.68 points, 0.3%, at 10,708.33, the FTSE 250 rose 35.08 points, 0.1%, to 24,526.45, and the AIM all-share rose 0.44 of a point, 0.1%, to 795.84.
In European equities, the Cac 40 in Paris rose 0.2%, and the Dax 40 in Frankfurt ended slightly higher.
“After the return for risk appetite which saw the Nasdaq advance to a new record last night, there was a more measured feel to proceedings in Asia and Europe on Tuesday,” said AJ Bell investment director Russ Mould.
In New York, the Dow Jones Industrial Average was down 0.5% at the time of the closing bell in London. The S&P 500 was flat, and the Nasdaq Composite firmed 0.4%.
On Monday, the technology-laden Nasdaq surged to a record high, shrugging off AI bubble concerns. The catalyst was news that Meta Platforms’ personal AI agent Muse continued to climb in the App Store and was the most-downloaded free app in the US.
Susannah Streeter, chief investment strategist at Wealth Club, said the launch of Muse in an easy-to-use app form has set “pulses racing” about widespread adoption.
“Meta’s agent interacts with a user’s digital experience, linking diaries and mail, and can shop and make bookings. With expectations that the social network will integrate even further into the lives of billions around the world, and demand huge amounts of supporting infrastructure to do so, Meta’s shares have rocketed,” she said.
Meta traded 1.1% higher on Tuesday after soaring 11% on Monday. It has risen 33% in the past month.
Also supporting the market mood was a further drop in oil prices on hopes of diplomatic progress in the US-Iran war.
Iran’s President Masoud Pezeshkian is heading for New York to attend the UN General Assembly, with investors hopeful he will meet US President Donald Trump.
Reports suggested Iran would consider reopening the Strait of Hormuz “within seven days” should the US take steps to ease military pressure on Tehran.
The initial report came from Japan’s Kyoto News, which said this would be a precursor to renewed talks with the aim of agreeing to a permanent end to hostilities.
David Morrison, senior market analyst at Trade Nation, said: “It sounds as if the US blockade has been successful in crippling Iran economically. If that is the case, then it will give President Trump a window of opportunity to boast of victory, just ahead of the mid-term elections in November.
“This could improve the Republicans’ chances, even after the Federal Reserve hiked borrowing costs at last week’s meeting.”
Mr Mould cautioned that for oil to fall further, signs of tangible diplomatic progress would need to come “sooner rather than later”.
Brent oil was quoted at 99.39 dollars a barrel in London on Tuesday at the time of the equity market close, down from 100.28 late on Monday.
The yield on the US 10-year Treasury was quoted at 4.96%, narrowed from 4.97%. The yield on the US 30-year Treasury was quoted at 5.30%, unchanged from the day before.
The pound was quoted at 1.3342 dollars on Tuesday, down from 1.3372 at the same time on Monday. Against the euro, sterling firmed to 1.1662 from 1.1658.
Figures from the Office for National Statistics showed UK public sector borrowing was higher than expected in August.
The ONS said public sector net borrowing amounted to £18.27 billion, up from £15.35 billion a year before and £2.04 billion in July. Borrowing in July is typically lower than other months due to the timing of additional receipts from self-assessed income tax.
The August reading was higher than expected, as the FXStreet-cited consensus had pencilled in £15.7 billion.
On the FTSE 100, Kingfisher and Smiths Group led the risers after well-received earnings.
London-based DIY retailer Kingfisher gained 12% as a stronger-than-expected performance by Screwfix supported an increase in full-year profit guidance.
Kingfisher, which also owns brands such as B&Q and Castorama, now sees adjusted pre-tax profit for the full year between £595 million and £635 million, its guidance range lifted from £565 million to £625 million.
Kingfisher said strong growth at Screwfix and in Poland and Iberia offset lower sales at B&Q and Brico Depot France.
Smiths Group advanced 7.5% after it announced a new share buyback despite reporting a decline in annual profit.
JD Sports Fashion was in demand, up 6.4%, ahead of Wednesday’s half-year results, while the lower oil price lifted British Airways owner International Consolidated Airlines by 1.6%.
Hopes for diplomatic progress in the Middle East and Ukraine put defence contractors BAE Systems and Babcock International in the red, down 2.8% and 2.1% respectively.
Asia-focused lender Standard Chartered fell 2.3% after an investigation by the Financial Times revealed that it, along with other global banks, processed billions of dollars for A7, a Kremlin-backed fintech network using forged documents to bypass western sanctions.
Shore Capital analyst Gary Greenwood believes the story is a “useful reminder” of the additional risks inherent in Standard Chartered’s business model.
“The group’s strategy is built around facilitating cross-border trade and capital flows across Asia, Africa and the Middle East, regions that can present elevated sanctions, financial crime and compliance risks relative to more domestically focused banking franchises.
“The jurisdictions highlighted in the investigation, including Hong Kong, the UAE and Kyrgyzstan, are all markets in which the group has an established presence,” he said.
On the FTSE 250, Kingfisher’s results lifted Wickes and Travis Perkins, which were up 5.7% and 2.6% respectively, while Vistry gained 3.4% ahead of Thursday’s strategic review outcome.
Gold was quoted at 4,328.77 dollars an ounce, down from 4,352.65.
The biggest risers on the FTSE 100 were Kingfisher, up 38.0p at 343.7p, Smiths Group, up 193.0p at 2,783.0p, JD Sports Fashion, up 4.7p at 78.7p, Coca-Cola HBC, up 130.0p at 4,408.0p, and Croda International, up 83.0p at 3,292.0p.
The biggest fallers were BT Group, down 7.6p at 191.4p, Admiral Group, down 130.0p at 3,706.0p, Autotrader Group, down 14.0p at 484.1p, BAE Systems, down 57.0p at 1,993.0p and London Stock Exchange Group, down 196.0p at 8,154.0p.
– Contributed by Alliance News
