Global stock markets rally on global optimism

Global stock exchanges rallied on Tuesday amid a flurry of optimism which sent the pound up to two-week highs.

The FTSE 100 in London rose back above 7,000 as a 178-point rise left it at 7,086 points.

The 2.6% rise was the best performance for the index since June, but it is still far off recent highs after a sell-off sparked by the Government’s mini-budget.

The pound continued its rebound from its recent malaise, hitting a high of almost 1.145 dollars on the day. Shortly after markets closed in London it had risen by more than 1% on the day.

“The pound has continued its upward trajectory as concerns ease as gilt markets continue to cool,” said Joshua Mahony, senior market analyst at online trading platform IG.

“While markets appear to have reacted positively to the Chancellor’s 45p tax rate U-turn, today has seen (Kwasi) Kwarteng flip-flop once again by returning to his original stance that the OBR (Office for Budget Responsibility) forecast will only come in late November.

“While the pound has gained ground against the dollar, this is largely a reflection of a wider improvement in risk sentiment.”

The FTSE rose on the day, but it performed worse than its European neighbours.

In France the Cac 40 closed up 4.2% while Germany’s Dax index rose 3.8%.

In New York the S&P 500 was trading up 2.8% and the Dow Jones was up 2.6% shortly after markets closed in Europe.

Shares in Greggs soared by more than a 10th on Tuesday as the business revealed that sales were soaring as customers looked for cheaper lunches.

The business said sales rose 15% over the last three months.

“I think people just want to seek good value,” chief executive Roisin Currie said.

“So if our customers are worried about the cost of living, and they are travelling, at work or out with friends and they are hungry, then they are coming to us for a good deal.”

Greggs has increased the price of its sausage rolls for the third time this year, to £1.15 – from £1 at the end of 2021.

The biggest risers on the FTSE 100 were Flutter Entertainment, up 896p to 10,590p, Ocado, up 41.3p to 507p, Intermediate Capital Group, up 83.7p to 1,083.5p, IAG, up 7.4p to 101.06p, and Hargreaves Lansdown, up 63p to 922.6p.

The biggest fallers were Centrica, down 0.66p to 71.4p, SSE, down 13p to 1,560p, Aveva, down 12p to 3,167p, British Land, down 1p to 354.5p, and Segro, down 3p to 754p.