Finally... the blue-chip FTSE 100 ended the day little changed, up just 6 points at 7,403. That’s a two-week high.

But the smaller FTSE 250 stole the limelight for once, ending at a 16-month high of 20,864, up 161 points or 0.8%.

Pets at Home led the charge, up 16% after posting strong results, followed by luxury carmaker Aston Martin (which announced a tie-up with British Airways today for a limited-edition sports car).

Among smaller companies, De La Rue finished down 23%, as investors baulked at its concerns that it might collapse.

The pound is still showing some weakness, down a third of a cent at $1.286.

But generally it was a quiet day - Alibaba’s share sale in Hong Kong was the most interesting thing to happen.

Connor Campbell of SpreadEx sums up the day:

Though quiet, the Dow Jones still managed to add 40 or so points – enough to lift it back above 28100 and to an effective all-time high. Elsewhere the CAC added 0.2% to nudge towards its own fresh 12-year peak, while the DAX was broadly unchanged at 13250, a level it has found it pretty hard to escape for any great stretch of time in the last 3-weeks.

As for the FTSE, a 0.1% increase took it to 7400, less than a week after striking an intraday low of 7200.

After sharply rising on Monday on the back of polls pointing to an 80-seat majority for the Tories, the latest surveys showing a shrinking lead for Boris Johnson and co. caused the pound to go in reverse. Against the dollar it shed 0.3%, causing cable to abandon $1.29; against the euro, meanwhile, a 0.4% retreat left it the wrong side of €1.168.

Goodnight! GW

Britain’s FTSE 250 index has hit its highest level in 15 months today.

The index of medium-sized companies (too small for the Footsie 100) has gained 152 points, or 0.75%, to 20,854 today.

That’s its best level since July 2018, before Brexit worries and fears of a global slowdown sent markets sliding.

The FTSE 250 has gained almost 20% since mid-October, when Boris Johnson persuaded the EU to reopen the Brexit Withdrawal Agreement.

It’s recent gains come as City traders grow more confident that the Conservatives will win a majority on 12 December, says Russ Mould of AJ Bell:

“The market seems to be growing more confident that the Conservative Party will win the general election in December, thus bringing some clarity to what might happen with Brexit and – importantly – removing an element of uncertainty which has hung over UK equities for some time.

Today’s top risers are Pets At Home, up 12%, after posting 7.8% jump in half-year sales and a 18.9% surge in underlying pre-tax profits this morning.

Ouch! Wall Street bank Citi has been fine £44m by the Bank of England for serious errors in reporting its capital and liquidity positions.

It’s a record penalty from the BoE, which has found that Citi failed to adequately report its capital strength, and its ability to rapidly access the value of its assets.

That included “six substantive matters” between 2014 and 2018 which had a material or potentially material impact on the numbers Citi reported to the Bank’s Prudential Regulation Authority.

PRA chief Sam Woods says:

“Citi failed to deliver accurate returns and failed to meet the standards of governance and oversight of regulatory reporting which we expect of a systemically important bank.”

The good news? Citi didn’t actually slide into a capital or liquidity crisis - but if it HAD been, UK regulators couldn’t have spotted it.

The BoE says:

While Citi remained in surplus to its liquidity and capital requirements at all times, the failings persisted over a significant length of time and were serious and widespread in nature.

Sterling continues to be knocked around by the latest political developments, as the general election race heats up.

The pound has shed half a cent this morning, to $1.285, after an opinion poll showed Boris Johnson’s lead over Jeremy Corbyn has narrowed.

A survey by Kantar published on Tuesday found that the Conservative Party have an 11 point lead over Labour, down from 18 a week ago.

Yesterday, though, the pound had rallied after a Financial Times poll of polls showed the Tories pulling ahead with a 14-point lead over Labour, with 43% support.

The pound typically rallies when another hung parliament looks less likely, as investors aren’t keen on the prospect of yet more Brexit deadlock.

Mujtaba Rahman of Eurasia Group believes a Conservative majority looks increasingly likely, telling clients:

• The likelihood that the Tories disastrous 2017 election experience repeats itself now seems unlikely.
• We are increasing the probability of a Tory majority government from 45% to 60% and reducing the odds of a Labour minority government from 30% to 25%; we are also reducing the probability of a Tory minority government from 15% to 10%, but hold the risk of deadlock at 5%.
• A Johnson-led government will pass the Withdrawal Agreement in December and attempt to conclude a Canada-style free-trade agreement by December 2020; however, a one-year extension to the transition is likely, probably in May or June next year.

De La Rue’s share price is on track to close at their lowest level since 1998!

Today’s “wave of bad news” shows that the bank note printer has “fallen flat on its face”, says Russ Mould of stockbrokers AJ Bell.

He writes:

Just when you thought it couldn’t get any worse for De La Rue along comes another wave of bad news....a warning that it may not be able to stay running as a business if trading conditions keep getting worse, it incurs extra costs linked with various contingent liabilities and growth areas don’t achieve forecast margins.

“It is drowning in debt and has this year seen most of the executive team leave or resign, causing further instability in the business.

“In an increasingly cashless world one has to wonder just how long De La Rue can survive without a radical change to its business model. It has already restructured its operations into two divisions – authenticating goods as genuine and currency services – but one has to wonder if this is still enough to secure its future.

Mould suspects that De La Rue could be scooped up by a larger rival, when the price is right....

“But would a potential suitor act now or sit on the side lines in hope that the price could get a lot cheaper? After all, De La Rue still has many negative factors to stomach including a fraud investigation into suspected corruption in South Sudan.

“The business seems to have fallen flat on its face as a result of poor management decisions at a time when it needed superior leadership to navigate difficult market challenges. Sadly shareholders are now suffering the consequences.”

While Alibaba romps away, UK bank note maker De La Rue is having a torrid morning.

Shares in De La Rue have plunged by 20% this morning, after it reported an 87% plunge in operating profits for the last six months.

The firm also suspended its dividend, and warned there is “significant doubt” over its ability to continue as a going concern.

De La Rue has suffered a series of blows in recent years, including failing to win the contract for Britain’s new Brexit passports. It also lost £18m when the Bank of Venezuela failed to pay its bills.

Clive Vacher, CEO of De La Rue, warned investors this morning:

The business has experienced an unprecedented period of change with the Chairman, CEO, senior independent director and most of the executive team leaving or resigning in the period. This has led to inconsistency in both quality and speed of execution.

The new Board is working to stabilise the management team, which we believe will take some time.

With the Serious Fraud Office investigating possible corruption in South Sudan, and Brexit threatening to disrupt its links with European customers, De La Rue faces huge challenges.

Shares have slumped to 141p, down from 175p last night and around 420p at the start of the year....

Reaction to follow...

There’s a knack to selling shares -- you want to price them high enough to raise plenty of funds, but low enough to ensure a ‘pop’ as hungry investors pile in.

Alibaba appears to have got this one right - ensuring a decent rally after its Hong Kong debut today.

Bloomberg calls the surge in Alibaba’s share price “a triumph”, adding;

Alibaba Group Holding Ltd. rose 7.7% in its Hong Kong debut, capping a landmark share sale that unfolded during violent anti-government protests.

Chairman Daniel Zhang, lieutenants wearing Alibaba lapel pins and Hong Kong dignitaries were on hand to strike the opening gong Tuesday at a celebration of the city’s biggest stock listing this year. The company presented a Chinese-style painting to the exchange -- a souvenir to go with the showy coming-out party. The Chinese e-commerce giant’s shares rose to as much as HK$189.50, versus a HK$176 issuance price.

The Financial Times says Alibaba’s Hong Kong debut is “a vote of confidence by Beijing in Hong Kong’s future”.

It adds:

Dickie Wong, head of research at broker Kingston Securities, said Alibaba’s Hong Kong debut was “slightly better than expected” and that the shares were a shoe-in for quick inclusion in stock connect programmes that would allow investors in mainland China to trade them.

“This is definitely a must-have stock for the portfolio of a local investor,” he said.

The South China Morning Post (which is owned by Alibaba!) says Asia’s most valuable company is having a strong day:

If sustained, the gain will rank among the best first-day performances involving the biggest IPOs in the city since 2005, after AIA Group (17.1 per cent), Bank of China (15.3 per cent), Industrial and Commercial Bank of China (14.7 per cent) and China Unicom (8.9 per cent).

The Alibaba listing comes as a shot in the arm for Hong Kong at a time when the city is seeking to rebound from its worst political crisis in history, with the economy in a technical recession.

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

The biggest share sale of the year is going with a bang today, as investors shrug off worries over trade wars and global growth.

Alibaba, the Chinese e-commerce giant, has successfully sold around £8.8bn of shares through a secondary listing in Hong Kong. It’s a vote of confidence in the company, and also Hong Kong’s financial system itself after months of pro-democracy protests.

The Hong Kong exchange put on a good show -- complete with a gong and an array of cartoon characters mark the occasion.

CEO Daniel Zhang gave the gong a hearty tap, and told the audience that Alibaba has “returned home to Hong Kong” (having floated in New York back in 2014). This won a large round of applause from the crowd.

Charles Li, chief executive of Hong Kong’s stock exchange operator, also talked up the significance of the float, saying:

After five years of travelling afar, [Alibaba has] decided to come home.

Despite the difficulties and challenges in Hong Kong.”

Investors promptly charged in, sending Alibaba’s stock surging more than 6% -- above the price set in New York last night.

Alibaba has been given the stock code 9988 – numbers that are considered auspicious in Chinese culture and represent eternal prosperity. With its annual Singles Day event hitting a new sales record this month, that feels appropriate.

The sale has already raised $11.3bn, which could rise to $12.9bn if Alibaba exercises the option to sell an extra tranche of shares (an over-allotment option, as they say). This means it’s exceeded Uber - whose IPO had been the biggest share sale of the year.

This cash could help Alibaba invest in its online offering. But there’s another factor too - having a base of investors in Asia could be helpful if relations between Beijing and Washington deteriorate.

This early success highlights that the markets are still in bullish mood, with the US indices hitting record highs again on Monday.

We also saw a flurry of takeover action yesterday, with luxury goods firm LVMH buying Tiffany’s, online broker Charles Schwab agreed to buy TD Ameritrade, drugs firm Novartis acquiring rival Medicines Co, Viagogo snapping up StubHub and a Mitsubishi-led consortium agreeing to pay €4.1bn for Dutch utility Eneco.

Markets.com analyst Neil Wilson says this flurry of deal-making is partly because recession risks have eased, while recent interest rate cuts mean there’s lots of easy money around. But there’s a political factor too...

Perhaps some fears a Democrat in the White House might take a harder line on deal making. Clearly Trump is laxer on deals – companies want to act now while the going is good.

Also coming up today

The US economy will be under the microscope, as new trade data, house price stats and consumer confidence figures are released.

Markets are expected to be calm, helped by encouraging noises about progress in the US-China trade talks. Still no actual deal yet, though...

The agenda

• 1.30pm GMT: US trade balance for October: expected to widen to -$71bn, from -$70.4bn
  
  
• 2pm GMT: US house price index for September: Expected to rise by 0.3%
  
  
• 3pm GMT: US consumer confidence survey for November: expected to rise to 127, from 125.9