The FTSE 100 dipped on Tuesday as London’s leading index continued to shift back and forth on headlines from the Middle East.
But this wasn’t the case with other global indices, especially US bourses, where a technology recovery helped drive stocks higher.
The NASDAQ closed 0.8% higher overnight, and futures were pointing to a stronger start today as investors digested the news that OpenAI has filed for an IPO, joining SpaceX and Anthropic in the race for trillion-dollar listing valuations.
SpaceX is set to price this week in the most highly anticipated US IPO for years. Elon Musk’s space exploration company is on target for a $1.75 trillion valuation, making it the biggest IPO in history.
But any excitement around AI IPOs was lacking in UK markets, where the focus was on oil and inflation.
“The wind keeps changing direction on the Iran war, meaning investor sentiment is running hot and cold depending on the rhetoric,” says Russ Mould, investment director at AJ Bell.
“The Brent crude oil price has become a proxy for whether markets think the Middle East conflict will soon be resolved or not, and today’s 1% drop to $93.32 per barrel would suggest renewed optimism.
“Markets have bounced back after a major sell-off last Friday on Wall Street, although the FTSE 100 is a laggard thanks to being dragged down by BP and Shell amid a lower oil price, and by investors trimming positions in the pharma space.”
The FTSE 100 was also hit by GSK, whose shares fell after it announced the acquisition of Nuvalent for $10.6bn.
Housebuilders were among the best performers of the day, with Persimmon and Barratt Redrow adding more than 2% on the back of a positive update from Bellway.
Investors are adopting a braced position, awaiting Housebuilder updates, but Bellway’s update was actually quite good, with guidance maintained despite the obvious pressures from higher mortgage rates caused by the war in the Middle East.
Mark Crouch, market analyst for eToro, said: “Bellway’s update is a reassuring one for investors, particularly given the backdrop of higher mortgage rates and persistent affordability pressures. While the house builder has seen demand soften somewhat in April and May, reservation rates remain ahead of first-half levels and cancellation rates are still exceptionally low, suggesting underlying buyer confidence remains relatively resilient.”