FTSE makes modest gains after battering on Monday

AFTER briefly looking like it might recover a large part of the ground lost on a tough Monday, the FTSE 100 closed up modestly on Tuesday.

The City’s top index gained 26.64 points, or 0.4 per cent, by the end of the day, ending at 7,243.22.

It had traded as high as 7,311.65 earlier in the day.

The index made up some lost ground, but it is still around 150 points off where it started the week after dropping 2.3 per cent on Monday.

“European markets have seen a modest rebound from yesterday’s two-month lows, after the carnage of the last three days, as investors look for signs of a possible base,” said CMC Markets analyst Michael Hewson.

“The FTSE 100 is also seeing a decent session, however it is still some way short of reversing the losses we saw yesterday.

“Today’s rebound has been led by some of the more beaten down areas of the market, with Melrose Industries doing well after hitting one-year lows yesterday.

“It is also notable that while we are seeing some decent gains today, consumer staples are still lagging the wider market, showing that investors remain concerned about consumption trends, and the effect higher inflation will have on consumer spending patterns.”

The stragglers included British Airways owner IAG, which is reportedly going to overhaul its management after facing staffing issues.

Its shares shot to the bottom of the index after dropping 3.5 per cent.

US markets lost further ground from Monday as the S&P 500 dropped 0.2 per cent while the Dow Jones fell 0.4 per cent.

Germany’s Dax closed up 1.2 per cent while the Cac 40 in Paris rose 0.5 per cent.

Sterling gained 0.02 per cent against the dollar and one pound would buy 1.2316 dollars, and it gained 0.11 per cent to 1.1693 euros.

In company news the owner of British Gas said its earnings will be at the top end of its previous targets.

Centrica said it has benefited from its nuclear and gas production business units, and reported that it has “managed increased commodity price volatility well” recently.

It comes as rising global energy prices have increased bills for households.

The energy price cap was set at £1,971 for the average household at the start of last month, an increase of nearly £700. Shares rose 3.5 per cent. Diageo has sold flavoured liqueur brand Picon to Italian spirit rival Campari Group in a 119 million euro (£102m) deal.

The London-based drink giant, which owns Gordon’s gin and Baileys, said it will continue to produce the Picon brand for the next two years as part of a twoyear supply deal.

It is the latest sale by Diageo as it continues to reshape its portfolio, following the sale of Windsor Scotch whisky brand to South Korean investors for £132m earlier this year.

“As part of our commitment to delivering consistent, efficient growth and value creation for our shareholders, we maintain a sharp focus on active portfolio management,” commented John Kennedy, Diageo’s president for Europe.

The biggest risers on the FTSE 100 were Melrose Industries ,up 4.05p to 111.65p, Phoenix Group, up 19.4p to 590.6p, and Hargreaves Lansdown, up 25.4p to 879.4p.

The biggest fallers on the FTSE 100 were IAG, down 4p to 123.02p, Airtel Africa, down 4p to 140.2p, Informa, down 12p to 531.4p, and Endeavour Mining, down 41p to 1,915p.