The FTSE 100 gave up early gains on Tuesday as losses in heavyweights such as BAE Systems and AstraZeneca offset a strong rally for Kingfisher.
London’s leading index was dead flat at the time of writing, having been around 30 points higher in early trade.
The main story in town on Tuesday was another boost to investor sentiment from fresh record highs in the US overnight. Unfortunately, this sentiment didn’t spill over into the UK’s top stocks.
US tech shares were front and centre again after Nvidia announced it would invest $100 billion in ChatGPT owner OpenAI as part of a partnership to build AI factories using Nvidia chips.
“The FTSE 100 ticked higher on Tuesday as US shares were higher despite the hoo-ha around visa fees,” said AJ Bell investment director Russ Mould.
“Helping to draw focus from this issue was Nvidia’s $100 billion tie-up with OpenAI which helped US indices and some Asian markets to new record levels.
“There was a split of opinion on whether this reflected the fact there is no alternative to Nvidia for the chips required to power AI or whether it was questionable that Nvidia was effectively funding a customer to buy its products.”
Regardless of the actual reason behind the deal, the market appreciated Nvidia’s investment, and shares rose by 4%.
Kingfisher was the FTSE 100’s top riser after the DIY specialist announced it had increased its guidance for the year following an uptick in sales during their first half.
As well as being good news for Kingfisher, their results show the UK consumer still has some fight left in them, which bodes well for the wider economy.
“Kingfisher’s first half numbers showcase commendable operational execution in a tough retail environment. Underlying like-for-like sales climbed just shy of 2% supported by solid progress at both B&Q and Screwfix, and double-digit growth in trade and e-commerce channels,” said Adam Vettese, market analyst for eToro.
“Margin improvements and tight cost control lifted adjusted pre-tax profit by over 10%, and free cash flow rose 13.5%. Management’s decision to upgrade full-year profit guidance and accelerate the share buyback programme underlines confidence in their financial position and strategic momentum.”
Kingfisher shares were 15% higher at the time of writing.
Profit taking hit names such as Babcock and BAE Systems, which weighed on the index.