Early market roundup: FTSE 100 up despite US, Asia tech wobble

Stock prices in Europe were higher on Tuesday morning despite a fall in US and Asian tech stocks, and ahead of third-quarter US corporate banks earnings.

The FTSE 100 index traded up 95.25 points, 0.9%, at 10,751.53. The FTSE 250 was up 130.55 points, 0.5%, at 24,458.61, and the AIM All-Share was down 0.43 of a point, 0.1%, at 774.48.

The Cboe UK 100 was up 1.1% at 1,067.83, the Cboe UK 250 climbed 0.7% at 21,334.68, and the Cboe Small Companies added 0.2% at 18,954.89.

In European equities on Tuesday, the CAC 40 in Paris was up 0.3%, while the DAX 40 in Frankfurt climbed 0.2%.

The yield on the 10-year US Treasury eased to 5.20% early Tuesday, from 5.24% late Friday evening. The 30-year yield narrowed to 5.55%, from 5.60%. The US observed Columbus Day on Monday. The Securities Industry & Financial Markets Association in the US recommended a Treasury market closure on Monday as a result. Equities traded as normal, however.

The Dow Jones Industrial Average added 0.4%, but the S&P 500 lost 0.1% and the Nasdaq Composite fell 0.4%.

In Tokyo, the Nikkei 225 slumped 1.8% on Tuesday, after a public holiday on Monday. In China, the Shanghai Composite ended up 0.1%, while the Hang Seng Index was 0.2% higher. Sydney's S&P/ASX 200 closed slightly higher.

The pound rose to USD1.3231 on Tuesday from USD1.3211 at the time of the London equities close on Monday. Against the euro, it fell to EUR1.1820 from EUR1.1829.

The common currency bought USD1.1190, up from USD1.1169. Against the yen, the buck fell to JPY158.17 from JPY158.74.

The US earnings season kicks off on Tuesday with major banks reporting.

Analysts at Deutsche Bank commented: "JPMorgan, Goldman Sachs, Wells Fargo and Citigroup all report today, followed by Bank of America, Morgan Stanley and BlackRock tomorrow. Financials are actually expected to be one of the sectors with the weakest YoY growth so be aware of that as you digest today's results. Overall, our US equity strategists expect S&P 500 earnings growth to remain at a record 34% YoY in Q3, versus consensus at 27%. Their view is that consensus is again embedding too much of a slowdown, leaving scope for another quarter of above-average beats.

"Ahead of the onslaught there has been a big sell-off in tech overnight, seemingly on concerns over Chinese AI competition. The catalyst for the latest AI-driven sell-off came after the South China Morning Post reported yesterday morning that China's CXMT memory chipmaker had made good progress on new DRAM architecture that would boost memory density. So that led to a fall in several memory makers."

The International Monetary Fund on Tuesday forecast global growth in 2026 would slow less than previously expected because of advanced economies' "resilience" in the face of war-fuelled energy prices, but warned low-income countries remained vulnerable to the supply shock.

The IMF raised its 2026 global growth forecast by 0.1 percentage points to 3.1%, compared with 3.5% growth in 2025.

UK households are set to face a sharper rise in inflation than previously forecast as the conflict in the Middle East propels food and energy costs higher, according to the IMF.

Consumer prices are set to have increased by 3.3% in 2026, up from a previous prediction of 3.2%. This would mark the joint second-highest rate among the G7 group of countries.

Meanwhile, inflation is expected to slow to 2.8% for next year, but this is significantly higher than the 2.4% rate previously forecast by the IMF.

The report, which was released alongside annual meetings from the IMF and World Bank in Bangkok, also pointed to stronger-than-expected UK growth for this year.

UK gross domestic product is set to grow 1.3% this year, having previously predicted a 1% rise.

However, growth for next year is set to slow to 1.2%, down from a previous forecast of 1.3%.

Gold rose to USD4,190.42 an ounce early Tuesday, from USD4,167.84 late Monday afternoon.

A barrel of Brent fell to USD105.33 from USD106.60.

A Houthi official on Monday warned the US it would receive a "painful response" if it entered the war in Yemen, where Saudi Arabia has reportedly requested Washington's help in dealing with the group as it weathers repeated attacks.

Following an attack at the Riyadh airport on Saturday that killed 13 people, US President Donald Trump said he was considering joining Saudi strikes against the group, after having reportedly rebuffed previous requests for help from the kingdom.

"The Houthis are misbehaving very badly. They're misbehaving very badly. No good," Trump said on Monday.

"If the US becomes involved in the aggression against Yemen, we will not deliberate over the decision to respond, rather, there will be a swift and painful response targeting the US and all its interests in the region," Houthi political bureau member Mohammed Al Bukhaiti told AFP in an interview.

In London, NatWest shares rose 3.0%, with the lender among the best performers in early trade. Barclays raised the stock to 'overweight'.

Whitbread added 2.8% as it said its Premier Inn unit has outperformed in the UK & Ireland.

Whitbread said group profit fell in the half year ended August, as costs increased, but revenue rose.

BP added 1.5% as it reported stronger refining margins in the third quarter, as well as a reduction in net debt.

In a pre-results trading statement, it also said it will hold a strategy update in December.

Analysts at Panmure Liberum commented: "The weak balance sheet has been a bugbear of investors for some time, and the boost from higher commodity prices has clearly allowed them to tackle this. However, we still remain concerned about the bloated cost base and would like to see some efforts from management to properly tackle this."

In the FTSE 250, housebuilder Bellway added 2.8% as it announced a £150 million share buyback to take place during its new financial year.

For the year ended July 31, pretax profit rose 22% to £270.2 million from £221.9 million, while revenue increased 14% to £3.16 billion from £2.78 billion.

"Since the start of the new financial year, the subdued trading conditions experienced from late spring have continued. Customer demand remains constrained by affordability pressures, with mortgage interest rates above prior-year levels, while wider economic uncertainty continues to affect homebuyer decision-making," it said.

Pub company Marston's surged 18%. For the year ended September 26, it expects underlying pretax profit at the top end of market expectations, which it puts at a £76.1 million to £83.2 million range.

"We have delivered a third consecutive year of significant profit growth, margin improvements and strong recurring free cash flow," Chief Executive Officer Justin Platt said. "Our progress over the last three years shows the momentum we have as a high margin, highly cash generative local pub company, with profits substantially up and debt levels halved. With clear strategic priorities and our new format conversion programme expanding to at least 100 pubs next year, we enter the new year well set to drive our next phase of growth."

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