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(Adding share price changes for mining stocks, and correcting AIM All-Share closing figures.)
(Alliance News) - Stock prices in London came to a mixed close on Tuesday, while the FTSE 100 was lifted by mining and oil stocks, as well as Asia-focused financial firms, as the outlook in China improved.
The FTSE 100 index closed 37.98 points, 0.5%, at 7,512.00. The FTSE 250 ended down 85.46 points, 0.4%, at 19,206.89, and the AIM All-Share closed down 6.70 points, 0.8%, at 844.22.
The Cboe UK 100 ended up 0.5% at 751.76, the Cboe UK 250 closed down 0.6% at 16,618.29, and the Cboe Small Companies ended flat at 13,025.91.
In European equities on Tuesday, the CAC 40 in Paris ended marginally higher, while the DAX 40 in Frankfurt ended down 0.2%.
"After a poor start to the week European markets have edged modestly higher today, except for the FTSE100 which has moved above the 7,500 level, helped by a strong performance from HSBC, and a more positive vibe from Chinese markets," said CMC Markets' Michael Hewson.
Beijing's National Health Commission pledged to "accelerate the increase in the vaccination rate for people over the age of 80, and continue to increase the vaccination rate for people aged 60-79".
Just 66% of people over 80 are fully vaccinated, NHC officials told a press conference Tuesday, and China has not yet approved mRNA vaccines for public use.
China's low vaccination rates, particularly among the older population, have long been seen as prolonging Beijing's no-tolerance approach to Covid, with even small caseloads met with harsh lockdowns and quarantine.
The vaccine news comes as China's major cities of Beijing and Shanghai were blanketed with security on Tuesday in the wake of nationwide rallies calling for political freedoms and an end to Covid lockdowns.
Oil prices jumped higher on the prospect of a pick-up in demand from China. Brent oil was quoted at USD85.06 a barrel late Tuesday, up sharply from USD82.84 late Monday.
The higher price for Brent was good news for FTSE 100-heavyweight oil majors, with Shell and BP adding 1.7% and 1.8% respectively.
The dollar gained ground against sterling, and the euro following hawkish rhetoric from the US Federal Reserve on Monday.
St Louis Federal Reserve President James Bullard said markets are underestimating the chances that US central bankers may enact more chunky rate hikes next year to tame inflation.
Bullard affirmed that he believes the Federal Reserve will need to lift the federal funds rate to at least the bottom of a 5% to 7% range. The benchmark rate is currently 3.75% to 4.00%.
The pound was quoted at USD1.1982 at the London equities close on Tuesday in London, down from USD1.2025 on Monday. The euro stood at USD1.0340, down against USD1.0377 late Monday.
Against the yen, the dollar was trading at JPY138.38, down from JPY138.89.
The prospect of further interest hikes was less positive for US equities, however, as was data that confirmed a fall in US consumer confidence, adding weight to the prospect of a recession.
Stocks in New York were lower at the London equities close, with the DJIA down 0.4%, the S&P 500 index down 0.5%, and the Nasdaq Composite down 0.7%.
US consumers were gloomier about the state of the American economy in November, likely due to a rise in gas prices and as recession risks loom, according to the latest survey.
The closely-watched consumer confidence index dipped to 100.2 in November, down two points from the month before, in a second straight month of decline, said think tank The Conference Board.
The drop in consumer confidence this month, in line with analyst expectations, was "most likely prompted by the recent rise in gas prices," she said.
In London's FTSE 100 index, firms with exposure to China were top performers.
In the finance sector, HSBC, Prudential and Standard Chartered rose 3.8%, 4.1%, and 4.7%.
HSBC was also boosted by news that its subsidiary HSBC Overseas Holdings UK agreed to sell its Canadian banking business to the Royal Bank of Canada.
The Asia-focused lender said the Royal Bank of Canada will acquire 100% of the issued common equity of HSBC Canada for a cash consideration of CAD13.50 billion, which is around USD10.10 billion.
HSBC said it estimated a pre-tax gain of USD5.70 billion for the sale.
The sale follows a strategic review of HSBC Canada, which HSBC said considered the branch's relatively low market share and the group's ability to invest in HSBC Canada's expansion and growth in other markets. HSBC said the best course of action was to sell the business.
"This appears to be the latest example of Asia’s largest bank looking to gravitate away towards its core markets in Asia, and in so doing helping to keep its shareholders onside as it looks to boost the resilience of its core operations, as well as improving pay-outs," said CMC's Hewson.
Miner Rio Tinto added 3.9%.
Mineral explorer Bluejay Mining said the processing of data from the Enonkoski nickel-copper-cobalt project in Finland is nearly complete. The Enonkoski project is a part of a joint venture with Rio Tinto and Bluejay. Initial results from the project are "encouraging", Bluejay said
Other bluechip miners were also faring well on the improved outlook in China. Antofagasta was up 1.9%, Glencore added 1.2%, and Anglo American rose 3.7%.
Gold fetched USD1,753.25 an ounce, up sharply from USD1,743.16.
Luxury clothing retailer Burberry added 1.4%, with China being a key market for luxury goods.
At the other end of the bluechip index was Halma, down 6.1%.
UBS downgraded the strong to 'neutral' from 'buy'. The Swiss bank noted the safety equipment maker has underperformed its targets for acquisitive profit growth.
"Larger deals [are] needed to move the dial," UBS considered.
In the FTSE 250, John Wood Group plunged 15% as it guided for a continued revenue decline in 2022, despite trading in the first ten months of the year being in line with its expectations.
John Wood said it expects annual revenue of between USD5.2 billion and USD5.5 billion, down at least 14% compared to USD6.40 billion in 2021, which itself was a 15% drop from USD7.56 billion in 2020.
easyJet was down 2.6% despite reporting a "record bounce back" amid a sharp rise in annual revenue and a significantly narrowed loss.
The low-cost airline said revenue in the financial year that ended September 30 multiplied to GBP5.77 billion from GBP1.46 billion, while its pretax loss narrowed to GBP208 million from GBP1.04 billion.
easyJet credited the relaxation of Covid-19 restrictions and an increase in ancillary product sales for the revenue rise, however, it warned of higher fuel prices and market-wide inflationary pressures in the year ahead.
"There is still some concern compared to the likes of its peers Jet2 and Ryanair, that it appears to be lagging behind when it comes to maximising its capacity and pushing up its load factors," noted CMC's Hewson.
On AIM, Renalytix jumped 20%.
The diagnostics company announced new "encouraging" real-world evidence for its KidneyIntelX bioprognostic test. The test resulted in "improved clinical decisions and outcomes in high-risk patients with early-stage diabetic kidney disease".
In Wednesday's UK corporate calendar, there are half-year results from water utility Pennon, luxury fashion company Mulberry and consumer gift packaging and stationery firm IG Design Group, as well as full-year results from specialist asset manager Impax Asset Management.
The economic calendar has UK shop price index and the CBI service sector survey, as well as Australian consumer inflation and Japanese industrial production overnight, there's German unemployment at 0855 GMT, and EU flash consumer inflation at 1000 GMT
By Elizabeth Winter; elizabethwinter@alliancenews.com
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