Optimism Drives British Stocks Higher Amid Tariff Talks

British stocks rose as investors became optimistic about tariff outcomes. The FTSE 100 and FTSE 250 both increased, driven by gains in commodities, construction, and energy sectors. However, UK inflation data and a budget update are awaited, as retail sector struggles.

British stocks saw gains on Tuesday, buoyed by optimism over potential conciliations in U.S. tariff policies. The benchmark FTSE 100 rose by 0.3%, breaking a three-session losing streak, while the midcap FTSE 250 also increased by 0.3%.

Commodity and construction sectors led the rise, with industrial and precious metal miners experiencing growth due to heightened demand for safe-haven assets like gold. Also contributing to the rally were energy stocks, climbing 1.1% as oil prices increased for a fifth consecutive day. The energy giant Shell played a crucial role in driving the FTSE 100 up by 1.5%, following announcements regarding enhanced shareholder policies and reduced spending outlooks.

While the construction firm Morgan Sindall soared by 8.6% on positive annual forecasts, housebuilders benefited from government promises to invest 2 billion pounds in social housing. Conversely, the retail sector faced challenges, dropping by 1.8% amid significant sales declines. Investors remain attentive to UK inflation data and the impending budget update, which could affect economic growth forecasts.

(With inputs from agencies.)