UK stocks rallied at the open on Tuesday as investors returning from a long weekend played catch-up with stronger European and global markets.

The export-heavy FTSE 100 jumped 1.6%, while the domestically-focused FTSE 250 climbed 1.6%. The gains mirrored a surge across Europe and Asia after Chinese regulators announced plans to prop up markets.

Sentiment also remained supported by Federal Reserve chair Jerome Powell’s balanced speech on Friday, which provided enough dovishness to lift equities despite hawkish warnings on inflation.

In the FTSE 100, Bunzl shot up 4% after reporting higher revenue and profit, announcing two acquisitions and lifting its dividend. Miner Rio Tinto added 2% after finalizing the sale of a majority stake in its La Granja copper project to First Quantum.

Discount retailer B&M surged 5% as it reported robust sales growth despite pressure on consumer budgets. Defence giant BAE Systems rallied 3% after Germany indicated it may boost military spending.

Upbeat data showing UK shop price inflation continued to cool in August provided extra support. Shop prices rose at the slowest pace since October, some welcome relief for consumers amid the cost-of-living crisis.

In the FTSE 250, biopharma firm PureTech Health jumped 4% as its first-half loss narrowed while it advanced key drug trials. But telecom equipment maker Telent crashed 57% on issuing a profit warning due to parts shortages.

The wider gains highlight investors’ continued ability to brush off growth fears for now. China’s additional stimulus pledges have aided sentiment, even as factory activity contracted again in August per private sector data.

With recession risks lingering, markets remain sensitive to any renewed hawkish tilt from central banks. But for today, the Fed’s balanced message kept risk appetite intact.