Britain’s blue-chip index rose to a three-week high on Tuesday, lifted by financial stocks, while retreating oil prices and easing bond yields also supported risk appetite.
The FTSE 100 index rose 0.73% to 10,762.01 points to its highest since September 23 by 10:23 AM GMT, while the midcap FTSE 250 was up 0.28%.
Oil prices dropped 2% on prospects of additional diesel supplies from Russia. In London, BP shares rose 1.3% to a six-month high after the energy giant estimated its third-quarter refining margins had tripled from last year.
UK’s 10-year benchmark gilt yields fell nearly 5 basis points to 5.40%. The International Monetary Fund said that Britain needs to keep deficit reduction on track. British finance minister John Healey will not raise capital gains tax to the same level as income tax, the FT reported on Tuesday, citing four sources. “John Healey will opt for a compromise Budget on Wednesday 28th October, with limited implications for the economy and the markets,” said Ruth Gregory, deputy chief UK economist at Capital Economics, in a note.
The broader banks sector was up 1.2%. NatWest advanced 2.6% after Barclays upgraded the stock to “overweight” from “equal-weight”. Melrose Industries led gains on the FTSE 100 with a 3.6% rise, after the GKN Aerospace owner said its Garden Grove plant in California was on track to resume operations by the fourth quarter. Premier Inn owner
Whitbread rose 2.2% to its highest since March after unveiling a five-year turnaround plan and recommending that shareholders vote against activist investor Corvex Management’s demand for a board seat. Among other sectors, healthcare gained 1.7%, and precious metal miners added 1.5%, tracking higher gold and silver prices.