FTSE 100 ticks higher as sentiment rebounds
The FTSE 100 rose on Tuesday as sentiment continued to rebound, with Trump taking an increasingly conciliatory approach to the midterm defeat and showing willingness to seek a diplomatic resolution to the war in Iran.
Ultimately, this could mean lower oil prices, which is something equity bulls can get behind and the FTSE 100 rose 0.3% on Tuesday.
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“It’s quite remarkable to think investors were showing signs of panic less than a week ago, and now markets are merrily pushing higher as if there’s nothing to worry about,” said Russ Mould, investment director at AJ Bell.
“US tech stocks bounced back sharply on Monday, and European and Asian markets were all solid on Tuesday in response. A further pullback in oil prices certainly helped to lift the market mood, with Brent crude trading 1.8% lower at $90.92 per barrel.
“Markets are increasingly taking the view that Donald Trump needs to forge a new path if he wants to save face from the midterm election washout, and that might mean finding a way to end the Iran war. In doing so, he would, in theory, help bring down energy costs which would bring relief to consumers and businesses.”
Evidence of this was seen in consumer stocks, including Next, JD Sports and Marks & Spencer, which rose on Tuesday.
But the biggest gains were found in FTSE 100 banks and financials on Tuesday. Lion Finance was top of the pile again, with the stock on track to resume its multi-year uptrend.
Prudential, HSBC, and NatWest were also among the top fallers.
Vodafone
Vodafone was the standout corporate story on Tuesday after the telecoms group upgraded guidance in a messy H1 results distorted by impairment charges.
However, the stock fell 1.1% as investors digested slower growth in its key German market.
“Indeed, Germany might be Vodafone’s big beast by total revenue, but growth is undeniably sluggish,” said Duncan Ferris, Analyst, Freetrade.
“Organic service revenue shifted into reverse gear in Q2 as its mobile business reckons with a reduced pool of customers spending less money, while fixed service and business revenue growth decelerated from Q1 levels.”
BP and Shell were the FTSE 100’s top fallers as oil dropped to $91 per barrell.
