Following on from the Dow Jones’ gains at the end of yesterday’s session, and green boards in Asia overnight, the European markets rebounded at the start of Tuesday morning.
A general lack of update on the US-Iran situation – or, rather, the absence of any further escalation after the initial flurry of responses to the assassination of Qassem Suleimani – appeared to cause investors to dip back into the markets.
The Dow Jones finished up at 28700 on Monday, dragging itself from its sub-28400 lows, and is now only a 200-point stretch from the all-time highs struck at the start of the year. This led onto a 1.6% rise for the Nikkei, a 0.34% increase for the Hang Seng and a 0.69% jump from the Shanghai Composite, in turn sowing the seeds for a positive open in Europe.
The FTSE, which has managed to avoid the worst of the US-Iran losses thanks to the presence of BP (LON:BP), Shell (LON:RDSa) and BAE Systems (LON:BAES) in its make-up, could only add 0.1%, keeping it the wrong side of 7600. The fact the pound saw a second day of gains, following on from Monday’s services PMI-assisted rebound, didn’t help. Sterling climbed 0.3% against dollar and euro alike, taking it to $1.32 and €1.18 respectively.
In contrast the DAX saw another big swing as it added 1% – still, however, leaving it 200 points off where it was on the 2nd January. The CAC, meanwhile, rose 0.7% to hit 6050.
Despite an ‘unusually challenging’ Christmas Morrison (LON:MRW) still managed to add 3% on Tuesday, the supermarket back to £1.98 having struck £1.92 on Monday. The company suffered a 1.7% drop in like-for-like sales (excluding fuel) across the 22 weeks to January 5th, compared to the 3.6% rise seen for the same period last year. Investors will perhaps take comfort in the fact that upstart Aldi also saw a slowdown in sales growth yesterday. Ditto that Morrisons full year pre-tax profit forecasts remain with the band of current analyst expectations.
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