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Commodity stocks buoy London as European markets make gains

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Gains in London were modest compared with Paris (Jonathan Brady/PA) (PA Archive)
Gains in London were modest compared with Paris (Jonathan Brady/PA) (PA Archive)

European markets made steady increases on the back of a solid showing for commodity firms as they also benefited from a positive return to trading in the US.

Gains in London were modest compared with Paris, which rebounded strongly after President Emmanuel Macron’s coalition lost its majority on Sunday.

The FTSE 100 ended the day up 30.24 points, or 0.42%, at 7,152.05.

The German Dax increased by 0.2% by the end of the session, while the French Cac rose 0.75%

Michael Hewson, chief market analyst at CMC Markets UK, highlighted “another positive session for European markets, with a modest rebound in copper prices and other metals prices helping to lift the basic resources sector”.

He added: “The gains have been rather tepid in nature and are still some ways short of reversing the losses we saw last Thursday, with the FTSE 100 and Dax underperforming the Cac40.

“It is outperforming after falling sharply yesterday on the news that French President Macron’s reform programme is probably dead in the water, after the result of the weekend French elections.”

Meanwhile, sterling was uneasy and only made slight gains against a shaky euro after Bank of England chief economist Huw Pill said that the central bank would allow growth to weaken in order to help the bank hit its 2% inflation target.

The pound was down 0.05% against the dollar at 1.227 and rose by 0.15% against the euro at 1.164.

Airlines and holiday firms had a weak showing on Tuesday as Ryanair boss Michael O’Leary warned that disruption to flights is expected to continue throughout the summer due to staff shortages.

EasyJet was the worst performer in the FTSE 350, slipping by 28p to 415.7p, as it was also struck by the announcement that its Spanish cabin crews would be looking to go out on strike for nine days starting in July.

Elsewhere in company news, online retail firm Ocado saw shares drop after it raised £578 million from investors, including its leadership team, through a discounted share placing.

Ocado, which has also secured a £300 million finance facility, said funding from the share sale will be pumped into growth, particularly in its technology business.

Shares in the business finished 22p lower at 855.6p on Tuesday.

Packaging giant DS Smith closed higher after it shrugged off “significant cost increases” to post a surge in profits for the past year.

The paper seller reported a pre-tax profit of £378 million over the year to April, representing a 71% increase against the previous year.

The group was 10.5p higher at 292.8p at the close of play as a result.

The price of oil continued its recent steady incline from the month lows witnessed last week, as US figures showed continued demand from car owners.

Brent crude increased by 0.23% to 114.39 US dollars per barrel when the London markets closed.

The biggest risers on the FTSE 100 were DS Smith, up 10.5p at 292.8p, Avast, up 15.6p at 507.4p, Antofagasta, up 38.5p at 1,329.5p, Fresnillo, up 21.6p at 811p, and Melrose, up 3.9p at 156.25p.

The biggest fallers of the day were Ocado, down 22p at 855.6p, Admiral, down 54p at 2,103p, ABF, down 36.5p at 1,610.5p, Whitbread, down 52p at 2,606p, and Sainsbury’s, down 3.3p at 205.1p.

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