UPDATE 2-UK mid-caps hit two-month high on stimulus hopes

  • Reuters
  • Stock Market News
UPDATE 2-UK mid-caps hit two-month high on stimulus hopes
Credit: © Reuters.

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* IHG jumps on saying "very early" return in demand

* Global equities shrug off U.S.-China tensions

* BoE deputy governor signals room for more stimulus

* Housebuilder Bellway , Domino's Pizza slip on weak earnings

* FTSE 100 up 1.6%, FTSE 250 up 1.5% (Adds comments, updates prices to close)

By Sagarika Jaisinghani and Shreyashi Sanyal

Aug 11 (Reuters) - The UK mid-caps index touched its highest level in two months on Tuesday as hopes of a stimulus-led rebound helped investors look past a mixed batch of quarterly earnings updates, while InterContinental Hotels rose after signalling a tentative recovery.

The Holiday Inn owner IHG.L gained 4.7% after it said it was seeing some "very early" signs of returning demand as coronavirus-related restrictions eased in major markets. mid-cap FTSE 250 .FTMC rose for a third straight session, as Bank of England Deputy Governor Dave Ramsden said the central bank would step up quantitative easing if the economy slowed again. June gross domestic product figures are due on Wednesday. blue-chip FTSE 100 .FTSE added 1.6%, tracking gains in Asia and on Wall Street on relief that a U.S.-China spat appeared not to have spilled over into trade. MKTS/GLOB

"Hopes of bipartisan agreement on a U.S. fiscal stimulus package helped stoke the fires of a market rally on Tuesday with the FTSE 100 now up 4% since the start of August and back firmly above 6,100," said Russ Mould, investment director at AJ Bell.

Historic global stimulus and improving economic data have powered UK stock markets since a coronavirus-driven crash in March. Data on Tuesday showed British consumers spent the most in July since a coronavirus-led lockdown in March, as pubs, restaurants, barbers and beauty salons reopened. investors are cautious with unemployment remaining elevated and a resurgence in COVID-19 cases threatening another round of lockdowns, and the FTSE 100 has underperformed its European and U.S. peers. .FTNMX0530 , life insurance .FTNMX8570 and travel-related .FTNMX5750 stocks were among the top gainers of the day, while homebuilders .FTNMX3720 , utilities .FTNMX7570 and real estate .FTUB8600 firms lagged the wider market.

Housebuilder Bellway Plc BWY.L fell 4.5% as it built fewer homes in the year due to the lockdown.

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