London markets reached their highest points on Tuesday in more than a week. This happened as a result of the historic reversal of the government’s unfunded tax cut plans as well as hope for the next earnings season, which helped U.S. equities overnight.
The domestically focused FTSE 250 jumped 1.0% to a level not seen since Oct. 5, and the blue-chip FTSE 100 gained 0.9% to reach its best level since Oct. 10.
After Bank of America released good results, U.S. market indices closed significantly higher on Monday, raising expectations for a strong earnings season.
In an unprecedented policy U-turn to try to reverse a sharp decline in investor confidence, Britain’s new finance minister, Jeremy Hunt, on Monday abandoned Prime Minister Liz Truss’s economic strategy and cut back her expansive energy support program.
According to Sean Darby, global equity strategist at Jefferies, “the UK government has essentially pushed policy objectives back to the Bank of England and eliminated the idea that the two were at war with each other.”
At the end of the day, Darby said, “the UK government flinched, but the BoE has seen its credibility restored,” adding that there is room for a sizable shift in perception of the recently damaged domestically exposed FTSE 250.
An earlier news that the Bank of England was expected to further delay the commencement of its sales of billions of pounds’ worth of government bonds to assist stabilize the London markets provided comfort to investors. Later, the BoE claimed that the report was false.
Moneysupermarket.com, one of the individual stocks, increased 6.1% after the insurance pricing comparison website stated that it anticipated its annual core earnings to be at the higher end of market expectations.
WPP, a marketing company, increased by 4.2% after Publicis Groupe, a French rival, increased its full-year projection for the second time this year.
888 Holdings Plc fell 4.3% after the bookmaker disclosed a decline in third-quarter revenue due to tighter safety regulations for online players in the UK and the shutdown of its Dutch operations.
As the homebuilder warned of declining demand due to increased mortgage rates, Bellway Plc fell 0.7%.
