The FTSE 100 made steady progress on Tuesday, boosted by a US-China trade extension and broadly as expected US inflation figures.
The FTSE 100 index closed up 18.10 points, 0.2%, at 9,147.81. The FTSE 250 ended 46.80 points lower, 0.2%, at 21,842.69, while the AIM All-Share finished up 1.06 points, 0.1%, at 759.27.
In Europe, the CAC 40 in Paris rose 0.7%, while the DAX 40 in Frankfurt eased 0.2%.
In New York, the Dow Jones Industrial Average was up 1.0%, the S&P 500 was 0.8% higher, hitting an all-time high, and the Nasdaq Composite advanced 1.0%.
Annual consumer price index inflation in the US was a notch lower than expected, while core CPI was higher than anticipated in July, data published by the US Bureau of Labour Statistics showed.
The country’s annual CPI inflation rate was unchanged at 2.7% in July. This was the same as in June but lower than the FXStreet-cited market consensus of an uptick to 2.8%.
The monthly inflation rate slowed to 0.2% in July from 0.3% in June. The deceleration was as expected.
However, core annual CPI inflation increased to 3.1% in July from 2.9% in June, higher than the expected increase to 3.0%.
Monthly core inflation edged up to 0.3% in July, in line with market consensus, from 0.2% in June.
James Knightley at ING said: “Inflation was broadly in line with expectations as tariffs continue to be largely absorbed within US corporate profit margins. This gives the Fed the room to respond to the weaker jobs backdrop and cut interest rates from September.”
The CME FedWatch tool on Tuesday put a 90% chance of a 25 basis points interest rate cut at the September Federal Reserve meeting compared to 86% on Monday.
The pound jumped to 1.3509 dollars late on Tuesday afternoon in London, compared to 1.3402 dollars at the equities close on Monday. The euro climbed to 1.1682 dollars, higher against 1.1591 dollars. Against the yen, the dollar was trading lower at 147.83 yen compared to 148.09 yen.
Blue chips in London had earlier opened brightly as investors breathed a sigh of relief after a trade truce extension between the US and China.
As part of their May truce, fresh US tariffs targeting China were reduced to 30% and the corresponding level from China was cut to 10%. Those rates will now hold until November – or whenever a deal is agreed before then.
The yield on the US 10-year Treasury was at 4.30%, stretched from 4.28%. The yield on the US 30-year Treasury was 4.89%, widened from 4.84%.
Back in London, investors assessed the latest data on jobs and average earnings.
The Office for National Statistics (ONS) said the rate of unemployment in the three months to June remained at 4.7%, where it also had stood in the three months to May. Compared with the three months to March, however, the unemployment rate picked up from 4.5%.
The latest figure was in line with the FXStreet-cited market forecast.
Average weekly earnings, including bonuses in the three months to June eased to 4.6% from 5.0% in the period to May. Growth of 4.7% had been expected, according to FXStreet.
Regular pay growth remained at 5.0%, in line with expectations.
The ONS said an estimate showed payrolled employees fell by 149,000 on-year in June, and by 26,000 on-month.
“The early estimate of payrolled employees for July 2025 decreased by 164,000 on the year, and by 8,000 on the month,” the ONS added.
ING said while the UK jobs market is undoubtedly cooling, a more modest fall in payroll employment suggests that the worst may be behind us.
Better news on wage growth suggests the Bank of England can still afford to cut rates in November, though after “last week’s hawkish meeting, this call has become less clear-cut”, the broker added.
On the FTSE 100, half-year results from Spirax Group were seen as “very reassuring”, following a difficult period marked by significant headwinds, analysts on Tuesday said.
Shares in the Cheltenham-based industrial engineering company specialising in thermal energy management and fluid technology solutions soared 13% as it reiterated full year guidance and reported six-month results ahead of expectations.
Analysts at Citi said while guidance has been retained, “the beat in H1 combined with commentary on an expected H2 organic sales acceleration could lead to expectations that there is some upside potential to consensus expectations for the year, especially on margins”.
Panmure Liberum said the “strong results are a step back in the right direction”.
Spirax expects second-half organic sales growth to accelerate while organic margin progress is also expected to be greater than in the first half.
But Entain fell back 1.9%.
The Isle of Man-based gambling firm posted a £96.0 million pre-tax loss for the six months that ended on June 30, compared with a profit of £13.7 million the year prior.
This was partly due to a civil penalty imposed by the Australian Transaction Reports & Analysis Centre to which Entain allocated £47.7 million in the first half of 2025.
Despite this, Entain raised its full-year outlook for online net gaming revenue to be 7% higher on a constant currency basis, compared with the previous “mid-single-digit” growth range.
New guidance was added for Ebitda between £1.10 billion and £1.15 billion.
Bank of America said while the upgraded guidance may seem “modest”, it looks “well underpinned”.
Housebuilder Bellway climbed 1.6% as it predicted further growth in the financial year ahead, despite “softer” market conditions in recent months, and reported new home production ahead of guidance.
The Newcastle upon Tyne housebuilder said total housing completions increased by 14% to 8,749 homes in the financial year that ended July 31 from 7,654 a year prior, at an overall average selling price of around £316,000, up year-on-year from £307,909, both slightly ahead of previous guidance.
In June, the FTSE 250 listing had said it expected volume output in financial 2025 to be between 8,600 and 8,700 homes, raised from ‘at least 8,500’ before. Average selling prices were anticipated at £315,000.
Chief executive Jason Honeyman said it was a “solid” performance despite “ongoing headwinds for our industry”.
But Genuit fell 3.4% as it warned that the business environment remains challenging and market volumes are not expected to increase this year.
Brent oil was quoted at 66.29 dollars a barrel in London on Tuesday, down from 66.49 dollars late on Monday. Gold advanced to 3,355.98 dollars an ounce against 3,347.03 dollars.
The biggest risers on the FTSE 100 were Spirax, up 795.0 pence at 6,855.0p, Ashtead Group, up 168.0 pence at 5,164.0p, International Consolidated Airlines, up 11.2p at 385.1p, Airtel Africa, up 5.6p at 217.6p and Intercontinental Hotels, up 224.0p at 8,826.0p.
The biggest fallers on the FTSE 100 were Sage Group, down 55.5p at 1,095.5p, London Stock Exchange, down 468.0p at 9,434.0p, Entain, down 20.4p at 916.0p, United Utilities, down 23.5p at 1,113.0p and National Grid, down 21.5p at 1,035.0p.
Wednesday’s local corporate calendar has half-year results from Lloyd’s of London insurer Beazley, William Hill owner Evoke, and housebuilder Persimmon.
The global economic calendar on Wednesday has inflation figures in Germany and Spain.
– Contributed by Alliance News
