London’s stock market rally has shown no signs of slowing, with the FTSE 100 racing to fresh record highs on Tuesday amid renewed hopes of peace talks in the Middle East.
The FTSE 100 soared by more than 100 points, continuing the rally sparked a few weeks ago.
A strong session for banks and housebuilders helped lift the blue-chip index 100.18 points higher, or 1.22%, to 8,313.67 at the close.
Investor spirits were raised as global leaders continued to push for a pause in fighting in the Israel-Hamas conflict.
On Monday, Hamas said it had accepted an Egyptian-Qatari mediated ceasefire proposal, which Israel rejected because it failed to meet its “core demands”.
Nonetheless, oil prices were lower on Tuesday amid hopes of tensions easing in the region, with the price of Brent crude oil down about 0.2% to 83 US dollars per barrel.
Furthermore, investors appeared to still be holding on to hopes that interest rate cuts will be on the horizon.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “The FTSE 100 has scaled fresh heights as buds of May hope unfurl about interest rate cuts on the horizon.
“The blue-chip index smashed through the 8,300 mark in early trade as the feelgood factor around London-listed stocks continued.
“A set of soggy retail sales figures hasn’t squished enthusiasm, instead the data has served to provide fresh optimism that demand in the economy is falling back and that could help bring about the beginning of the end to painfully high borrowing costs.”
New figures from the British Retail Consortium and KPMG showed that retail sales dropped 4% in April versus the previous year.
Meanwhile, it was a strong session for other top European markets. Germany’s Dax neared a new all-time high, surging 1.45%, while France’s Cac 40 was up 0.97% at close.
Trading over in the US got off to a good start with the S&P 500 up 0.3% and the Dow Jones up 0.2% by the time European markets closed.
The pound was down 0.2% against the US dollar at 1.254, and also down 0.2% against the euro at 1.164.
In company news, BP was one of the handful of FTSE 100-listed companies to see its share price decline on Tuesday, after the energy giant revealed lower-than-expected profits.
It attributed the fall in earnings to lower oil and gas prices, the impact of an outage at its Whiting refinery and weaker fuel margins.
But it said this was partly offset by stronger oil trading. BP shares were 1.3% lower at the close.
Meanwhile, shares in JD Sports moved higher after the fashion chain announced it was opening a store in Bahrain, its first in the Middle East.
The company said it was a milestone in its international expansion strategy, and allows it to open more stores in locations including Egypt and the United Arab Emirates. Shares in JD were 2.7% higher at the close.
The biggest risers on the FTSE 100 were DCC, up 250p to 5,745p, SSE, up 71p to 1,780.5p, Barclays, up 8p to 210.35p, Persimmon, up 47.5p to 1,414p, and Fresnillo, up 18p to 567.5p.
The biggest fallers on the FTSE 100 were easyJet, down 31.4p to 510.2p, Burberry Group, down 29p to 1,151p, Melrose Industries, down 12.4p to 591.2p, BP, down 6.7p to 503.7p, and DS Smith, down 3.6p to 358p.