FTSE 100 holds onto gains as Liz Truss loses grip on power
The FTSE 100 closed 16.5 points higher, or 0.24%, at 6,936.74.
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.The FTSE 100 jumped to an 11-day high on Tuesday amid reports that Prime Minister Liz Truss was battling to hold onto her leadership position.
London’s top index jumped by around 1.4% at one point in the afternoon, surpassing the 7,000 mark for the first time in several days.
But it slipped back down later in the afternoon as it became clear that the Bank of England would not be delaying its plans to start selling UK government bonds again.
The FTSE 100 closed 16.5 points higher, or 0.24%, at 6,936.74.
It comes after the Bank’s two-week bond-buying programme, in which it scooped up £19.25 billion worth of gilts after UK pension schemes were scrambling to sell off assets.
The Bank dismissed reports that it would push back gilt sales to allow the markets time to recover, sending the pound lower and impacting gilt yields.
Sterling dived around 1.5% to 1.1258 US dollars at midday before clawing back some of its losses during the afternoon.
It was down 1.1% to 1.129 against the dollar and down 0.4% to 1.149 against the euro when markets closed.
“The pound’s recent rebound has run into some resistance today on reports that the Bank of England could push back its timeline for selling off parts of its bond portfolio,” said Michael Hewson, chief market analyst at CMC Markets UK.
“This became inevitable in light of the recent volatility in the UK bond market.
“Some Bank of England officials have pushed back on this, saying that no such thing has been decided. However, to go forward now would be foolhardy in the extreme given that sentiment remains fragile.
“Nonetheless, the prospect of a hefty rate hike in November has not diminished, with the market pricing in the prospect of a possible 100 basis point move.”
Elsewhere in Europe, its top indices had held on to the gains made on Monday. The German Dax closed 0.92% higher and the French Cac was up 0.44%.
US markets were also in the green after a boost in early trading led by strong quarterly figures from top investment bank Goldman Sachs. The S&P 500 was up 0.64% and Dow Jones was up the same amount when European markets closed.
In company news, housebuilder Bellway said that demand for new homes had dropped since August, compared to last year, as a result of rising mortgage rates and economic uncertainty.
It also told shareholders that it was expecting a fall in average selling prices but that this largely reflects a higher proportion of social housing sales.
Its share price was down 2.2%.
Gambling giant 888 said that it was making “rapid progress” integrating the William Hill operations that it bought for £1.95 billion earlier this year.
But the firm revealed that its sales had fallen over the past three months as stricter online safety measures took affect.
Shares in 888 were up 1.3%.
Meanwhile, shares in stockbroker finnCap Group soared by more than a quarter on Tuesday after it confirmed it is in talks with rival Panmure Gordon over a potential tie-up.
It said discussions were in an early stage, but investors reacted positively to the news and finnCap’s share price was up 30% when markets closed.
The biggest risers on the FTSE 100 were Smurfit Kappa Group, up 170p to 2,845p, Rolls-Royce Holdings, up 2.71p to 74.28p, DS Smith, up 10.3p to 285p, United Utilities Group, up 28.2p to 920p, and CRH, up 81p to 2,979p.
The biggest fallers on the FTSE 100 were Harbour Energy, down 17.5p to 383.9p, Centrica, down 2.94p to 69.36, Segro, down 16.4p to 750.6p, Barratt Developments, down 7.3p to 352.7p, and Airtel Africa, down 2.1p to 125.6p.