Easing global tensions help elevate FTSE

Market report Emma Newlands

The FTSE 100 followed global stocks higher as investors breathed a sigh of relief over easing tensions between the US and North Korea.

London’s blue-chip index ended the day higher by 49.18 points at 7,433.03, while the French Cac 40 and German Dax rose 0.71 per cent each.

Investors had been spooked recently due to a rising possibility of potential US military action against North Korea over its missile threats on Guam. But jitters eased on reports that North Korean leader Kim Jong Un said he will monitor US conduct more closely before deciding whether to order a missile test.

David Madden, a market analyst at CMC Markets, said: “We have recouped a lot of the ground that was lost because of the tensions that escalated last week, but we have not fully recovered.”

In currency markets, the pound was trading nearly 0.1 per cent lower against the US dollar at $1.285, but was up 0.2 per cent versus the euro at €1.09. The eurozone currency lost ground amid reports that European Central Bank president Mario Draghi would not be discussing its monetary policy at the US Federal Reserve’s Jackson Hole conference next week.

In UK stocks, BHP Billiton rose 26p to 1,368p after hedge fund and activist investor Elliott Advisors increased its stake in the company by 5 per cent to keep the commodities giant “accountable for delivering results”.

The biggest risers included Glencore up 14p to 345.25p, Old Mutual up 6.7p at 208.7p, and Sage Group up 21p at 704p. The biggest fallers included Direct Line Insurance Group down 9.4p at 386.3p, Severn Trent down 22p at 2,247p, and United Utilities Group down 8.5p at 909.5p. The construction firm jumped after swinging to a pretax half-year profit of £12 million from a £15m loss a year previously as it continued with its turnaround plan. The insurer fell as investors lamented sluggish bottom-line growth, with the firm reporting a 2 per cent rise in half-year pre-tax profits.