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London stocks rise after Tokyo gains


London Stock Exchange

London’s stock market rose on Tuesday following gains in Tokyo and a slump in the pound, with most world indices shut owing to public holidays.

Investors in London reacted to data showing that Britain’s manufacturing sector dropped to a 17-month low point in April.

The Markit/CIPS UK Manufacturing purchasing managers’ index (PMI) showed a reading of 53.9, down on March’s reading of 54.9.


The data weighed on sterling, as prospects for a May interest rate hike from the Bank of England receded further, analysts said.

The pound’s weakness though provided support to London’s benchmark FTSE 100 index, owing to the fact that it includes a number of heavyweight companies earning in dollars.

Earlier on Tuesday, Tokyo’s Nikkei closed higher in quiet trade during Japan’s Golden Week holiday period, as investors took to the sidelines ahead of key earnings and economic data in the US.

Wall Street closed down on Monday, despite a strong start with good earnings from McDonald’s and several merger announcements.

Oil prices fell in volatile trading Tuesday as investors kept watch on developments in the Middle East.

Crude futures had risen in Asian trading hours after Israeli Prime Minister Benjamin Netanyahu said he had fresh evidence that Iran is continuing with a nuclear weapons programme.

“Netanyahu stoked the geopolitical fires by accusing Iran of lying about its past nuclear intentions,” said Stephen Innes, head of Asia Pacific trade at OANDA.

Investors are watching for Apple’s earnings report later Tuesday, as well as the US Federal Reserve’s policy decision on Wednesday. That is followed by key US jobs data on Friday.

“US jobs data this weekend requires attention as momentum for a rise in salaries is emerging in the US,” leading to stronger inflation and worries about a rate hike by the Fed, said Tsuyoshi Nomaguchi, strategist at Daiwa Securities.

In company activity Tuesday, Sony shares tumbled around six percent after the electronics giant reported profits worth $4.5 billion (2.9 billion euros) but forecast a moderate slowdown.

Japanese telecoms giant SoftBank closed up 0.65 percent after its US subsidiary Sprint on Monday said it would form a new company with T-Mobile, a division of Germany’s Deutsche Telecom.

BP was up 1.0 percent at 543.40 pence in London deals after the British energy major BP said first-quarter net profits soared 70 percent on rising crude oil prices and increasing output.

– Key figures around 1045 GMT –
London – FTSE 100: UP 0.4 percent at 7,539.4 points

Tokyo – Nikkei 225: UP 0.2 percent at 22,508

New York – Dow: DOWN 0.6 percent at 24,163.15 (close Monday)

New York – S&P 500: DOWN 0.8 percent at 2,648.05 (close)

New York – Nasdaq: DOWN 0.8 percent at 7,066.27 (close)

Euro/dollar: DOWN at $1.2033 from $1.2078 at 2100 GMT on Monday

Pound/dollar: DOWN at $1.3687 from $1.3763

Dollar/yen: UP at 109.58 yen from 109.05

Oil – Brent North Sea: DOWN 51 cents at $74.18 per barrel

Oil – West Texas Intermediate: DOWN 63 cents at $67.94

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