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London markets jump as trading sentiment rebounds in Europe

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Henry Saker-Clark, PA City Reporter
·3-min read
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The FTSE 100 jumped to its best position in a fortnight as traders were buoyed by weakness in the pound and rebounding positivity around Europe.

Traders on the continent have put aside concerns over the potential third wave and vaccine woes to continue to focus on hopes for a strong recovery.

London’s top flight closed 35.95 points, or 0.53%, higher at 6,772.12 on Tuesday.

Germany’s top index again set new record highs on Tuesday, busting through the 15,000 level for the first time ever, driven by the likes of Volkswagen which updated investors on plans for its Voltswagen electronic car business.

The German Dax increased by 1.29% and the French Cac moved 1.21% higher.

Connor Campbell, financial analyst at Spreadex, said: “The Dax was driven higher by its auto stocks on Tuesday, while the Dow Jones stalled out of the gate.

“A similar month-end rise in bond yields, like that seen in February, prevented Dow Jones from matching the gangbusters gains posted by its European peers.

“Somewhere between the US and Eurozone lay the FTSE, which rose a respectable half-a-percent as the day went on.”

In the US, the main drag on the Dow Jones and S&P 500 continued to be Friday’s 20 billion dollar margin call, which despite being put to one side in Europe, has left a hangover stateside.

Meanwhile, sterling slid again as the US dollar went from strength to strength due to higher Treasury yields and improved consumer confidence data for March.

The pound decreased by 0.25% versus the US dollar to 1.373 and was up 0.1% against the euro at 1.170.

Financial firms have been among the day’s leading stocks, with Barclays and Lloyds both making gains in the FTSE on the back of higher yields.

In company news, Wetherspoon shares lifted after the pub chain said it is set to invest £145 million opening new pubs and upgrading existing ones, creating 2,000 new jobs.

The ambitious plans, which will see the group open 18 new pubs, will start within weeks of its pubs reopening fully as the lockdown eases.

Shares were 22p higher at 1,361p at the close of play on Tuesday.

Royal Mail also made gains after it announced the company expects to pay a special dividend of 10p a share to hand out surging profits made during the global pandemic.

The delivery firm, which said it expects operating profits to more than double, saw shares climb by 10.4p to 520.4p.

AG Barr shares dropped by 35p to 486p after the drinks supplier said its profits plunged 30.5% to £26 million for the year to January 24 as sales fell 11.2%.

The price of oil was in the red as concerns over tighter supply diminish now that the Suez Canal is set to reopen.

The price of Brent crude oil decreased by 1.32% to 64.12 dollars per barrel.

The biggest risers on the FTSE 100 were IAG, up 9.8p to 202p, Barclays, up 8.76p to 189.14p, Melrose Industries, up 7.1p to 171.75p, NatWest, up 7.55p to 197.3p, and Legal & General, up 9.8p to 285.6p.

The biggest fallers on the FTSE 100 were Fresnillo, down 36.2p to 857.4p, Ocado, down 47p to 2,030p, Severn Trent, down 48p to 2,294p, British American Tobacco, down 56.5p to 2,770p, and Polymetal, down 24.5p to 1,389.5p.