The FTSE 100 saw a volatile trading day, with shares advancing amidst a retreat in oil prices. Brent crude oil fell below $90 a barrel, a significant drop of 6.8%, primarily due to the US pausing strikes on Iran and an Omani delegation mediating talks for transit through the Strait of Hormuz. This reduction in geopolitical risk premium was a significant factor driving stock market gains, as noted by market analyst Russ Mould at AJ Bell.
Several major FTSE 100 companies released earnings or trading updates. AstraZeneca’s second-quarter figures provided a solid start, with its stock rising 2.6%. Vodafone was the biggest gainer, up 5% following its Q1 trading update. Unilever led the UK's blue-chip index with its best sales performance in over a decade, resulting in an 8.5% increase for the stock. In contrast, Barclays announced a new £1 billion buyback program after its second-quarter profit surpassed expectations, but its shares fell five percent, making it the biggest faller on Tuesday morning.
The broader market also had to contend with a continuing sell-off in the technology sector, impacting stocks globally. Despite this, the FTSE 100 managed to add 45 points on Monday, finishing at 10,781.75, and saw further gains on Tuesday, rising 89 points to 10,871. Investment banking revenue at Barclays increased by 20% to $3.96 billion, exceeding the $3.66 billion City consensus. Looking ahead, the UK reporting season is kicking into high gear, with more financial updates expected from other major companies, while central banks like the Warsh-led Fed and the Bank of England are not expected to raise interest rates soon, though markets anticipate potential moves in September.
