(Alliance News) – Stock prices in Europe ended largely higher on Tuesday, building on a confident start to the week, while equities in London also got in on the action following Monday’s public holiday.
Equities were boosted by US-EU tariff hope, and better consumer confidence data from the world’s largest economy.
“UK and US investors returned from their respective long weekends with a spring in their step thanks to the abrupt decision to pause higher tariffs on the EU,” IG analyst Chris Beauchamp commented.
“It is unwise to hope that all upcoming US data will be as encouraging as today’s confidence figure, but it is certainly a relief that US consumers have managed to maintain their sunny outlook.”
The FTSE 100 index ended up 60.08 points, 0.7%, at 8,778.05. The FTSE 250 jumped 229.86 points, 1.1%, at 20,938.58, and the AIM All-Share rose 3.87 points, 0.5%, at 739.91.
The Cboe UK 100 ended up 0.9% at 875.35, the Cboe UK 250 surged 1.6% at 18,485.05, and the Cboe Small Companies added 0.2% at 16,617.61.
In European equities on Tuesday, the CAC 40 in Paris ended a touch lower, while the DAX 40 in Frankfurt climbed 0.8%. Both registered convincing gains on Monday.
The pound was up at USD1.3515 late on Tuesday afternoon in London, compared to USD1.3509 at the time of the equities close on Friday. The euro stood lower at USD1.1337, against USD1.1348. Against the yen, the dollar surged to JPY144.22, from JPY142.70.
US President Donald Trump has expressed confidence in future negotiations with the EU over trade tariffs.
“I have just been informed that the EU has called to quickly establish meeting dates,” he wrote on his online platform, Truth Social, on Tuesday. “This is a positive event.”
He would unilaterally “set a deal” if the negotiators are “unable to make a deal, or are treated unfairly,” Trump wrote.
On Friday, Trump threatened the EU with punitive tariffs of 50% from June 1, only to postpone them soon afterwards.
Both sides now want to find a solution by July 9, when Trump’s tariff suspension expires.
European Commission President Ursula von der Leyen wrote on X at the weekend after a phone call with Trump that “Europe is ready to advance talks swiftly and decisively.”
In New York, the Dow Jones Industrial Average surged 1.2%, the S&P 500 jumped 1.6% and the Nasdaq Composite powered 2.0% higher around the time of the closing bell in London.
The yield on the US 10-year Treasury was quoted at 4.46%, narrowing from 4.51% at the same time on Friday. The yield on the US 30-year Treasury was quoted at 4.96%, narrowing from 5.04%.
Consumer confidence in the US improved more than expected this month, according to survey data released Tuesday, boosted by hopes of easing trade tensions after US President Trump’s tariffs jolted the economy.
The Conference Board’s consumer confidence index jumped 12.3 points to 98.0 in May, up from 85.7 in April, when it fell to its lowest level since the onset of the Covid-19 pandemic.
The figure was also notably higher than the 87.0-point reading that a consensus forecast by Briefing.com anticipated.
On the eve of the latest Opec+ meeting, Brent oil was quoted lower at USD63.14 a barrel late in London on Tuesday from USD64.71 late Friday. Gold fell to USD3,295.13 an ounce against USD3,356.90, amid the more risk-on mood due to the tariff hope.
In London, gains for the FTSE 100 were largely broad-based in an optimistic start to the trading week following Monday’s holiday.
Aerospace firm Melrose Industries rose 3.7%, British Airways parent IAG added 3.4%, while defence company BAE Systems climbed 3.1%.
Also on the up, AstraZeneca added 0.8%. It said its Imfinzi, or durvalumab, therapy has been recommended for approval in the EU for the treatment of muscle-invasive bladder cancer.
British American Tobacco fell 0.5%. It confirmed that it is evaluating a possible disposal of a small part of its interest in ITC, which has businesses across the consumer goods sector in India.
BAT announced it plans to sell 2.3% of ITC to institutional investors by way of an accelerated bookbuild.
Proceeds will provide tobacco firm BAT with “increased financial flexibility as it delivers on its commitment to invest in transformation, deleverage and sustainable shareholder returns”.
It said it can enable an intended GBP200 million increase in the share buyback to a total of GBP1.1 billion this year.
Elementis shot up 11% after it said it has agreed and completed the sale of its Talc business to global talc manufacturer IMI Fabi for an enterprise value of USD121 million.
The London-based chemicals maker said the disposal follows the launch of a strategic review of the Talc business in August 2024.
Analysts at Jefferies commented: “This will improve earnings quality and, importantly, reduce a significant overhang for the equity story, which we believe has acted as a hindrance to investor interest.”
Cambridge Nutritional Sciences rose 18%.
The London-based medical diagnostics firm expects to report pretax profit of GBP1.6 million for the year that ended March 31, swung from a GBP750,000 loss the year before. Total income is anticipated up 12% to around GBP11.1 million from GBP9.9 million.
“The new financial year has started positively as the growing revenue pipeline starts to flow through,” said Cambridge Nutritional. “This is early evidence of the more target focused delivery of the revenue strategy for financial 2026.”
The biggest risers on the FTSE 100 were Melrose Industries, up 16.68p to 468.08p, International Consolidated Airlines Group, up 10.72p to 330.52p, BAE Systems, up 57.00p to 1,900.00p, Intermediate Capital Group, up 46.89p to 2,004.89p, and Marks & Spencer, up 8.50p to 383.70p.
The biggest fallers on the FTSE 100 were Centrica, down 2.45p to 156.15p, Endeavour Mining, down 30.00p to 2,230.00p, Rio Tinto, down 57.99p to 4,483.00p, Fresnillo, down 11.00p to 1,112.00p, and Pearson, down 11.50p to 1,200.50p.
Wednesday’s UK corporate calendar has a trading statement from B&Q owner Kingfisher.
The economic events calendar has the latest batch of US Federal Reserve meeting minutes at 1900 BST, and a German unemployment reading at 0855 BST.
By Eric Cunha, Alliance News news editor
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