The FTSE 100 got off to an upbeat start on Wednesday as Smiths Group led the index higher after reporting strong revenue growth in its first quarter.
London’s leading index was trading 0.25% higher in mid-morning trade as it looked set to break a losing streak that had brought it within touching distance of 8,000.
Despite the strong start to trade, the FTSE 100’s early gains evaporated, and the index was trading down 0.15% at the time of writing.
“It’s still hovering around three-month lows as concerns linger about global growth,” explained Susannah Streeter, head of money and markets, Hargreaves Lansdown.
“China’s economy continues to be a worry, with the authorities’ attempts to inject the economy with stimulus seen as underwhelming.”
Streeter also pointed to ongoing uncertainty about Donald Trump’s impact on global growth as he takes power. “The impact of a second Trump term and its implications for global trade is also being mulled over.”
“Brent Crude is trading close to two-week lows, as investors digest OPEC’s re-assessment of demand for energy across the world next year. The hot enthusiasm which powered Wall Street higher following Trump’s re-election has cooled off. Investors are assessing the realities of governing for Trump’s second term, while the control of the House of Representatives is yet to be decided, with critical votes still being counted.”
In early trade, there was nearly a dead-even split between FTSE 100 constituents trading higher and those trading negatively. However, the sellers came out in force as the session progressed and dumped names such as Experian, Rightmove and Intermediate Capital Group.
Smiths Group, with a 10% rise, was the FTSE 100 top gainer after reporting a boost in revenues and margins.
“Industrial conglomerate Smiths Group appears to be firing on all cylinders based on its first-quarter trading update with an uplift in margins now expected for the year as a whole,” said Russ Mould, investment director at AJ Bell.
“This helped arrest a year-to-date decline in the share price with several areas of the business seeing strong organic revenue growth too. It will come as some relief to recently appointed CEO Roland Carter who had to deliver a disappointing set of full-year results just months into his tenure in September.”
“It may also reduce any clamour for a further break-up of a business which has several moving parts. It has faced pressure on this front before, leading to the divestment of its medical business in 2022.”