London’s top financial index finished higher for the first time in four sessions to start a recovery from Monday’s heavy market slump.
In a volatile session, London stocks spent large parts of the day in the red but recovered on the back of an improved session on Wall Street.
Gains for aerospace giants Melrose and Rolls-Royce after strong broker notes helped to propel the FTSE higher.
The FTSE 100 finished 18.46 points, or 0.23%, higher to end the day at 8,026.69.
Elsewhere in Europe, it was also an improvement on the previous session, although it was fairly choppy during the afternoon.
The Cac 40 in France ended 0.27% lower and the Dax index was up 0.09% at the close.
AJ Bell investment director Russ Mould said: “The FTSE 100 and some other European indices arrested the recent market rout and eked out some solid gains after stocks rebounded overnight in Asia.
“Fears about a sharp recession in the US, engendered by weak jobs data, remain and the unwinding of the yen carry trade may continue to play out, although whether the market moves are being exacerbated because many traders are on the beach is an open question.”
Across the Atlantic, the main US markets recuperated some losses by opening higher, with tech stocks including Nvidia particularly making positive strides.
Meanwhile, sterling dropped to its lowest level against the dollar in over a month despite stronger-than-expected data from the UK’s construction sector.
The pound was down 0.65% at 1.269 US dollars and was down 0.33% at 1.162 euros.
In company news, Domino’s Pizza Group dropped in value after reporting a decline in orders over the first half of 2024.
The pizza delivery giant cautioned that underlying earnings are on track to be at the “lower end” of forecasts after a slow start to the year dragged on its performance.
As a result, shares in Domino’s slipped by 7.1% to 287p.
Property website firm Rightmove was firmly in the red after major lettings agent OpenRent confirmed it would stop advertising its properties on the site due to a dispute over charges.
The two companies had been talks over a new contract but confirmed on Tuesday morning that their current deal will be terminated on September 1.
Rightmove shares were down 4.3% to 524.2p as a result.
Holiday Inn owner IHG was higher at the close after a rebound in US sales helped drive broad growth in revenues across the firm.
It came as the company called for calm to be restored after rioters attacked several of its UK Holiday Inn hotels. Shares were up 0.8% at 7,410p.
Elsewhere, the price of oil rebounded slightly after analysts at Goldman Sachs said they thought it had hit its floor amid hopes for recovering demand.
A barrel of Brent crude oil was down by 0.05% to 75.77 US dollars (£59.63) as markets were closing in London.
The biggest risers on the FTSE 100 were Melrose Industries, up 30p to 481.9p, Rolls-Royce, up 24.7p to 468.5p, Scottish Mortgage Investment Trust, up 38p to 806p, JD Sports, up 3.4p to 123.4p, and DS Smith, up 11.4p to 445.4p.
The biggest fallers on the FTSE 100 were Rightmove, down 23.8p to 524.2p, Endeavour Mining, down 65p to 1,559p, Fresnillo, down 17p to 533p, Entain, down 16p to 503.6p, and Burberry, down 17.8p to 696p.