(Sharecast News) - London stocks managed a positive close on Tuesday, having taken their cue from a solid session on Wall Street overnight, after a veritable tsunami of data earlier in the day.
The FTSE 100 ended the session up 0.96% at 7,535.78, and the FTSE 250 was ahead 1.1% at 22,167.94.

Sterling was also in the green, last trading up 0.46% on the dollar at $1.3509, and rising 0.39% against the euro to €1.2018.

"European markets have got off to a strong start to February, after last night's push back by a number of Federal Reserve officials, who poured cold water on some of the hawkish narratives being put out with respect to the Federal Reserve's hiking timeline," said CMC Markets chief market analyst Michael Hewson.

"This timely corrective, from the likes of Bostic, George and Daly, appears to have reset expectations of a 25 basis point move in March, and away from the narrative that had been suggesting we might see a move of 50 basis points."

Hewson said that correction could get added weight later in the week, if the January US payrolls report comes in weak on Friday.

"Over the last two weeks we've seen consensus expectations revised lower from 238,000 to 150,000, although we are seeing some estimates which suggest that we might see a negative number, due to an increase in sickness levels as a result of Omicron."

On the economic front, a survey released earlier showed UK manufacturing output strengthening in January, although new order growth slowed.

The IHS Markit/CIPS purchasing managers' index eased to 57.3 from 57.9 a month earlier, remaining well above the reading of 50 that separates growth from shrinkage.

Production rose at the fastest pace for six months as factories responded to new orders, backlogs of work and capacity shortfalls.

As a result, manufacturing employment rose for the 13th consecutive month.

"UK manufacturing made a solid start to 2022, showing encouraging resilience on the face of the Omicron wave, with growth of output accelerating as companies reported fewer supply delays," said Rob Dobson, a director at IHS Markit.

"Causes for concern remain, however, as new orders growth slowed, exports barely rose, staff absenteeism remained high and manufacturers' ongoing caution regarding supply chain disruptions led to the beefing up of safety stocks."

The UK housing market, meanwhile, had its strongest start to the year for nearly two decades in January, according to industry data, as supply failed to keep up with "robust" demand.

According to the latest Nationwide house price index, annual house price growth rose to 11.2% in January, compared to 10.4% in December.

The above-consensus rise was the highest since June 2021, and the strongest start to the year for 17 years.

Analysts had been expecting growth closer to 10.9%.

"Housing demand has remained robust," said Robert Gardner, Nationwide chief economist.

"Mortgage approvals for house purchase have continued to run slightly above pre-pandemic levels, despite the surge in activity in 2021 as a result of the stamp duty holiday, which encouraged buyers to bring forward their transactions to avoid additional tax.

"At the same time, the stock of homes on estate agents' books has remained extremely low, which is contributing to the continued pace of house price growth."

On a similar note, Bank of England data showed mortgage approvals jumping in December, also ahead of expectations.

According to the central bank's latest money and credit report, there were 71,015 approvals for house purchases in December, up from 67,859 a month earlier.

Most analysts were expecting a slight fall, to around 65,900.

Net borrowing of mortgage debt by individuals was £3.6bn, down slightly on November's £3.8bn, while gross lending fell to £21.7bn from £22.4bn month-on-month.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the unexpected jump in mortgage approvals "underlines that housing demand has remained strong".

"Nonetheless, the combination of rising mortgage rates, falling disposable incomes and low consumer confidence historically has depressed housing market activity, and greatly weighed on house price growth," he said.

Finally, the cost of living crisis rolled on, as industry data showed grocery inflation hitting 3.8% in December.

According to retail consultancy Kantar, the latest four-week grocery price inflation now stood at 3.8% - a 0.3 percentage point rise from December.

"Prices are rising on many fronts and the weekly shop is no exception," said Fraser McKevitt, head of retail and consumer insight at Kantar.

"Like-for-like grocery price inflation, which assumes that shoppers buy exactly the same products this year as they did last year, increased again this month.

"Taken over the course of a 12-month period, this 3.8% rise in prices could add an extra £180 to the average household's annual grocery bills."

In equity markets, miners were among the gainers as metals prices rose, with Anglo American up 3.18%, Glencore ahead 3.37%, and Antofagasta 2.18% higher.

Tech-focused investment trust Scottish Mortgage added 3.57%, following a strong performance from US tech stocks overnight.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said Scottish Mortgage was "lifted by a bounce in the Nasdaq yesterday, and in particular the rebound in Tesla and Nio shares which it holds".

High street lender Virgin Money UK reversed earlier losses to close up 0.11% after it lifted its guidance for its net interest margin - the difference between borrowing and savings rates.

On the downside, Vodafone Group was 1.58% weaker, having rallied on Monday on reports the telecoms company was being targeted by activist investor Cevian, putting management under pressure to improve its struggling performance.

Cineworld fell 4.03% after saying it had begun talks with former shareholders of its Regal Entertainment division in the United States over a potential rescheduling of its payment obligations.

The company in September said it would pay $170m to investors who were angry with the price they received when the company took over the chain in 2017.

To help discussions, Cineworld said it had obtained waivers of any events of default arising from non-payment under the unsecured facility agreement from "various other creditors".

Market Movers

FTSE 100 (UKX) 7,535.78 0.96%
FTSE 250 (MCX) 22,167.94 1.10%
techMARK (TASX) 4,431.23 0.04%

FTSE 100 - Risers

Fresnillo (FRES) 649.60p 3.97%
Scottish Mortgage Inv Trust (SMT) 1,117.50p 3.57%
Glencore (GLEN) 395.90p 3.37%
Rio Tinto (RIO) 5,350.00p 3.18%
Anglo American (AAL) 3,330.50p 3.18%
HSBC Holdings (HSBA) 542.60p 3.01%
Airtel Africa (AAF) 155.60p 2.95%
International Consolidated Airlines Group SA (CDI) (IAG) 160.32p 2.77%
BP (BP.) 393.30p 2.74%
Lloyds Banking Group (LLOY) 52.10p 2.62%

FTSE 100 - Fallers

Ocado Group (OCDO) 1,431.00p -4.85%
Admiral Group (ADM) 3,051.00p -2.96%
Vodafone Group (VOD) 127.96p -1.58%
BT Group (BT.A) 192.05p -1.51%
Imperial Brands (IMB) 1,728.00p -1.34%
AstraZeneca (AZN) 8,526.00p -1.25%
Rentokil Initial (RTO) 511.80p -1.24%
Informa (INF) 549.00p -1.08%
London Stock Exchange Group (LSEG) 7,144.00p -1.05%
Unilever (ULVR) 3,749.00p -1.02%

FTSE 250 - Risers

Baltic Classifieds Group (BCG) 180.00p 11.18%
Carnival (CCL) 1,412.60p 6.53%
Herald Investment Trust (HRI) 2,130.00p 6.42%
Syncona Limited NPV (SYNC) 199.80p 5.16%
Games Workshop Group (GAW) 8,300.00p 4.91%
Ferrexpo (FXPO) 254.00p 4.55%
Allianz Technology Trust (ATT) 298.50p 4.55%
Kainos Group (KNOS) 1,589.00p 4.47%
Future (FUTR) 3,268.00p 4.46%
TUI AG Reg Shs (DI) (TUI) 263.30p 4.36%

FTSE 250 - Fallers

Hipgnosis Songs Fund Limited C Shs NPV (SONC) 112.50p -100.00%
Darktrace (DARK) 389.40p -4.51%
Currys (CURY) 101.70p -4.33%
Cineworld Group (CINE) 37.66p -4.03%
PureTech Health (PRTC) 262.00p -3.85%
Johnson Matthey (JMAT) 1,891.50p -2.50%
Workspace Group (WKP) 827.00p -2.07%
Ashmore Group (ASHM) 276.40p -1.92%
Premier Foods (PFD) 115.80p -1.86%
Spirent Communications (SPT) 242.00p -1.79%