Britain's FTSE 100 shook off an early slide to close higher on Tuesday, lifted by bank stocks after strong U.S. lender earnings and a softer U.S. inflation print. The blue-chip index ended up 0.3% at 10,529.39, with Barclays, HSBC and Lloyds among the top contributors.
Bank stocks drove Britain's FTSE 100 to a higher close on Tuesday, reversing early losses after strong U.S. lender earnings opened the reporting season and a softer-than-expected U.S. inflation reading lifted bets on rate cuts. The blue-chip index ended up 0.3% at 10,529.39, after falling as low as 10,422.98 earlier in the session. The FTSE 250 midcap index was about flat at 23,406.83.
Banks and miners lead the advance
Wall Street banks posted strong second-quarter earnings, boosted by advisory fees and surging trading revenue, and that strength carried across the Atlantic. Barclays and HSBC both gained 1.9%, while Lloyds added 1%, offering the top boost to the index.
Miners joined the rally on firmer industrial metals prices. Glencore rose 3%, Rio Tinto gained 3.3% and Anglo American added 2.4%.
Energy support and healthcare drag
Energy stocks added further support. BP rose 2.2%, saying robust oil trading and higher refining margins would lift its second-quarter earnings, while Shell gained 1.2% as Brent crude held above $85, near four-week highs.
Not every corner shared the gains. Healthcare stocks were the biggest drag, with GSK down 1.7% and AstraZeneca off 2%.
What turned sentiment around
Earlier in the day, sentiment had been weighed down by growing bets on Bank of England rate hikes, higher oil prices amid Gulf tensions, and comments from a top Federal Reserve official pointing to a near-term rate increase. That mood shifted after U.S. consumer inflation slowed more than expected in June, tempering expectations for Fed tightening and boosting U.S. stocks.
Among midcaps, Debenhams Group rose 3.1% after the online retailer said positive trading momentum continued through June and July.
Source: London South East (Reuters)
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