FTSE closes at two-week high as stocks rebound from recent rout
European stock markets pushed higher on Tuesday as stocks continued to rebound from their recent sell-off.
The FTSE 100 (^FTSE) climbed 0.9% by the end of the trading session, reaching its highest level in more than two weeks, while the CAC (^FCHI) advanced 1% in Paris, and the Frankfurt DAX (^GDAXI) was 1% higher.
London’s benchmark index was at its highest since 10 June, with oil and mining stocks leading gains.
“Periods when the FTSE 100 rises in the region of 1% in a day should be celebrated given how this year has been so gloomy for investors. Today, the fireworks are most definitely lighting up the sky and the UK market is regaining its mojo,” Russ Mould, investment director at AJ Bell, said.
“Miners revved their engines yesterday following the G7 $600 billion infrastructure plan and were striking more gold today as investors continue to flock to the sector.
“Rio Tinto (RIO.L) jumped nearly 4%, Anglo American (AAL.L) and Glencore (GLEN.L) rose by 3% or more, and even oil producers BP (BP.L) and Shell (SHEL.L) were in vogue."
It came as Heathrow warned passengers on Tuesday that travel chaos will last until 2026 as thousands of customers continue to be hit by widespread cancellations due to staff shortages.
The airport has also been told by the Civil Aviation Authority (CAA) to cut landing fees, with a proposal for the average maximum price per passenger that airlines will pay Heathrow falling from £30.19 today to £26.31 in 2026.
The CAA says its final proposals would be “in the best interest of consumers”, and works out as a 6% reduction every year once you account for inflation.
Read more: Heathrow airport told to cut passenger charges
Across the pond, the S&P 500 (^GSPC) dipped 0.6% and the tech-heavy Nasdaq (^IXIC) fell 1.3%. The Dow Jones (^DJI) edged 0.3% lower at the time of the European close. It followed a sell-off of Wall Street on Monday.
“Richard Hunter, head of markets at Interactive Investor, said: “Markets in the US drifted lower after a recent run of gains, opening up the debate as to whether the spike was something of a relief rally, rather than a conviction rally.
“Investor confidence takes time to build but is easily shattered and as such volatility is never far away. Even so, the losses were shallow in the absence of any strong catalysts, with volumes light, suggesting that there could be an element of calm before the next set of challenges arrive.”
Watch: Stocks end lower, weighed by growth stocks
The Dow Jones has lost 13.5% so far this year, the S&P 500 18%, and the tech-heavy Nasdaq is continuing to bear the brunt of a higher interest rate environment, losing 26% year-to-date.
Traders will have their eyes on US consumer confidence and house prices later in the day.
Stocks in Asia pushed higher overnight thanks to the easing of COVID restrictions in China boosting sentiment.
The Nikkei (^N225) climbed 0.7% in Tokyo while the Hang Seng (^HSI) rose 0.9% in Hong Kong, and the Shanghai Composite (000001.SS) also gained 0.9% on the day.
China cut its mandatory quarantine period from three weeks to 10 days for inbound visitors, after cities such as Shanghai and Beijing also eased their lockdown measures.
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