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FTSE 100 closes in the green as US stocks trade higher

·Finance Reporter, Yahoo Finance UK
·3 min read
FTSE 100 A trader works on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., August 3, 2022. REUTERS/Andrew Kelly
The FTSE 100 and Wall Street got a boost following strong results from PayPal and CVS Health. Photo: Andrew Kelly/ Reuters

The FTSE 100 and European stock markets were given a lift by Wall Street on Wednesday as strong earnings boosted US stocks.

The FTSE 100 (^FTSE) managed to finish in the green as it climbed 0.3% while the CAC (^FCHI) in Paris was up by 0.7% at the closing bell. In Germany, the DAX (^GDAXI) advanced 0.5%.

On Wall Street, the Dow Jones (^DJI) was up 0.76% as trading ceased across Europe. The S&P 500 (^GSPC) was also in the green, advancing 0.97% to 4,131 and the tech-heavy Nasdaq (^IXIC) climbed 1.67% to 12,555.

The London bluechip index started the day on the back foot as investors remain cautious over interest rate rises ahead of Thursday's Bank of England (BoE) meeting.

The BoE is broadly expected to hike interest rates by 50 basis points on Thursday, its largest single increase since 1995.

Read more: How Bank of England’s interest rate rise will affect mortgages and house prices

Shares in cybersecurity firm Avast (AVST.L) jumped 42% after the competition watchdog provisionally cleared its £6bn ($7.3bn) takeover by rival NortonLifeLock.

Housebuilder Taylor Wimpey (TW.L) gained 5.1% after raising profit guidance to the top end of expectations amid "strong" housing demand even as interest rates rise.

“The company has reported pre-tax profit which is comfortably ahead of expectations, and up by 16.3% on the previous year." Richard Hunter, head of markets at Interactive Investor, said.

“Group completions are ahead of guidance, the average selling price on those completions is ahead by 3.1% and the value of the order book has increased from £2.6bn to £2.8bn."

Meanwhile, oil prices appear to have stabilised, with Brent crude (BZ=F) hovering around the $100 a barrel mark following an OPEC+ meeting.

OPEC+ agreed to raise its September oil output targets by only 100,000 barrels per day, dashing hopes of a larger increase.

In Asia, Tokyo’s Nikkei 225 (^N225) advanced 0.53% to 27,741 and the Hang Seng (^HSI) climbed 0.18% to 19,723 in Hong Kong, with sentiment across the continent boosted by US house speaker Nancy Pelosi’s safe arrival in Taiwan, despite threats of action from China. The Shanghai Composite (000001.SS) was the exception, falling 0.71% to close at 3,163.

Read more: UK on brink of recession, warns think tank

“I couldn’t resist engaging in the bizarre spectacle of tracking and then watching a US politician’s plane land yesterday afternoon US time. It seems like the entire market was also watching if you look at the reaction,” Deutsche Bank strategist Jim Reid, said.

“Yields sold off and US equities moved back into positive territory as US house leader Pelosi's plane landed in Taiwan without incident at 3:43pm BST yesterday. The last time I watched a plane tracker was when Liverpool tried to sign a player on transfer deadline day,” he added.

Watch: How does inflation affect interest rates?