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U.K. stocks clawed out of the red Tuesday as investors looked past worries about terrorist attacks in Europe and deal news for Lloyds helped financial stocks, but mining shares struggled once again.
The FTSE 100 UKX, +0.27% was up 0.2% at 7,028.99, but had trouble staying in positive territory as only the oil and gas, financial and health care sectors moved higher. The index had been down as much as 0.4% during Tuesday’s session.
“Losses are relatively muted in percentage terms, but enough of the big heavyweights are in the red to offset strength in names such as AstraZeneca and Lloyds,” said Chris Beauchamp, chief market analyst at IG, in a note. “Macro drivers are fast disappearing, while corporate news is also fairly light, so markets may struggle to find the ground on which to build a strong rally.”
See: When are European markets closed for Christmas and New Year’s holidays?
On Monday, the FTSE 100 rose 0.1%.
Terror fears: Travel stocks came into focus after attacks in Europe on Monday. In what German authorities are calling a “probable terror attack,” a truck plowed into a popular Christmas market in Berlin Monday night, leaving at least 12 dead. Earlier the same day, Russia’s envoy to Turkey was shot and killed in Ankara during a gallery opening, and three people were injured at a shooting at an Islamic center in Zurich.
Berlin truck crash a 'probable terrorist attack,' police say
A black semitrailer truck plowed through a busy Christmas market in Berlin, Germany, killing at least 12 people and injuring scores more. Police said the truck was steered deliberately.
Travel shares started in the red Tuesday but some eventually turned higher. EasyJet PLC EZJ, +0.39% rose 0.4%, Premier Inn hotel chain owner Whitbread PLC WTB, +0.25% gained 0.2%, and Carnival PLC shares CCL, +0.72% picked up 0.2%.
But travel services provider TUI AG TUI, -0.18% reversed gains and shed 0.3%. British Airways parent International Consolidated Airlines Group PLC IHG, -0.06% was off 0.4%, and InterContinental Hotels Group PLC IHG, -0.06% slipped 0.1%.
Overall, the “usual knee-jerk sell off on fears of a negative business knock-on for the likes of easyJet (EZJ), Ryanair (RYA), Int. Cons Airlines (IAG), Thomas Cook (TCG) and TUI (TUI) simply hasn’t materialized. Perhaps festive travel is regarded as something which simply can’t be eschewed,” said Mike van Dulken, head of research at Accendo Markets, in a note.
“The market response to each new terror event is less and less pronounced. Over the years, investors have learned to live with horror on a far too regular basis, leading to faster and faster near-term recovery in the aforementioned stocks,” he said.
Deal moves: Lloyds Banking Group PLC LLOY, +2.73% leapt 2.8% after the company said it’s buying MBNA Ltd., the U.K. credit-card business of Bank of America Corp. BAC, -0.79% , for £1.9 billion ($2.35 billion), as part of its plan to expand its consumer-finance business.
The “deal will mean the bank has now cornered a quarter of the U.K.credit card market,” said Laith Khalaf, senior analyst at Hargreaves Lansdown in a note.
“This does mean a special dividend for 2016 has become less likely, but at the same time the additional earnings from the credit card book bolster the dividend-paying prospects of the bank in years to come,” he said.
In other deal developments, London Stock Exchange Group LSE, -0.68% shed 0.8% as the exchange operator is in talks to sell its LCH SA clearing business to Euronext NV ENX, +2.76% .
Digging down: Miners were among those weighing on the FTSE 100, with metals prices still battling U.S. dollar strength. Gold futures GCG7, -0.98% fell 0.6% and silver prices SIH7, -1.61% dropped more than 1%. The U.S. ICE Dollar Index DXY, +0.46% was gathering steam again to trade at its highest since 2002.
Shares of Randgold Resources PLC RRS, -1.49% and Antofagasta PLC ANTO, +0.15% each fell 1%, as did stock in Fresnillo PLC FRES, -0.90% . Glencore PLC GLEN, +0.22% was off by 1% and BHP Billiton PLC BLT, +0.74% BHP, -1.35% BHP, -0.72% was lower by 0.3%, paring losses.
Meanwhile, U.K. retail sales rose by the most in more than a year in December, the Confederation of British Industry said Tuesday. Department store chain Marks & Spencer Group PLC shares MKS, +1.19% were up 1.1%, and apparel and home furnishings seller Next NXT, +0.81% piled on 0.7%. But electronics retailer Dixons Carphone PLC DC., -0.75% was down 1.3%.
The pound GBPUSD, -0.4437% was buying $1.2343, down from $1.2406 late Monday in New York.
