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FTSE close: Global stocks rally on cooler inflation, but strong pound weighs on FTSE

Global stock markets rallied on Tuesday following a cooler-than-expected US inflation report which boosted hopes the Federal Reserve could pivot to less aggressive interest rate hikes. However, London’s FTSE trailed other indices as a stronger …

Global stock markets rallied on Tuesday following a cooler-than-expected US inflation report which boosted hopes the Federal Reserve could pivot to less aggressive interest rate hikes. However, London’s FTSE trailed other indices as a stronger pound weighed on some heavyweight multinational stocks.

The FTSE 100 gained 0.2% to finish at 7,440.47, lagging gains in Europe and Wall Street. The midcap FTSE 250 index climbed 3.5% to 18,536.13, while the AIM All-Share index added 1.3% to 709.72.

A firmer pound, which hit its highest level against the dollar since August, dragged on FTSE companies with overseas earnings like GSK, Shell and Unilever. Their shares fell 1.7%, 1.4% and 0.9% respectively.

Vodafone shares plunged 5.5%, as the telecom giant reported a drop in first-half profit from €1.69 billion to €550 million and a 4.3% decline in revenue. It swung to a 4.3% loss to €21.94 billion from €22.93 billion.

DCC surged 12% as the sales and marketing firm raised its dividend despite an 11% drop in revenue and a 59% slide in profit.

In the FTSE 250, Elementis saw its shares jump 5.2% after setting out new financial targets including an adjusted operating margin above 19% by 2026. It also aims for above-market revenue growth amid cost-cutting efforts.

In the FTSE AIM, Horizonte Minerals cratered 48% as it scaled back construction plans at its Araguaia project in Brazil to conserve cash, pending additional financing.

The cooler-than-expected US CPI print boosted expectations that the Fed could slow its rate hike pace as soon as December. Markets are now betting on potential rate cuts in the second half of 2023.

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