The FTSE 100 was higher on Tuesday, with defensive shares helping the index outperform amid the AI wobble that hit overseas bourses.
London’s leading index was 0.4% higher at the time of writing.
This was at odds with US indices, where NASDAQ futures were pointing to tech shares opening deep in the red, while the broader S&P 500 was set for a marginally lower open.
“Energy and consumer non-cyclical stocks lifted the FTSE 100 as investors looked for opportunities away from the tech space,” said Dan Coatsworth, head of markets at AJ Bell.
Coatsworth continued to explain that tech stocks remained a drag on investor sentiment despite a brief reprieve on Monday after a lukewarm reception to
“Although Samsung’s results were stellar, investors are getting nervous about the scale of money ploughing into AI and whether it’s a bubble waiting to burst,” Coatsworth said.
“This is where the UK stock market has an advantage. In an environment where tech is going out of favour, the FTSE 100 could shine as it has everything else on the menu. There are plenty of jam today companies on the UK stock market offering decent profits and much less of the jam tomorrow-type companies omnipresent in the US.”
Unilever, one such ‘jam today’ company, was among the top risers, gaining 2%, demonstrating the defensive nature of today’s rally.
Shell’s 2.1% increase on Tuesday after releasing results added significant points to the index, helping the FTSE 100 into positive territory.
“Shares climbed as investors welcomed indications of strong activity in its gas trading and LNG operations,” said Susannah Streeter, Chief Investment Strategist, Wealth Club.
“Although the fallout from the Iran conflict has been a double-edged sword, damaging gas infrastructure and disrupting production from Qatar, it’s simultaneously creating more favourable trading conditions amid heightened volatility in global LNG markets. Shell is also being supported by higher energy prices, with oil shifting higher as attention has turned again to the perils of navigating the Strait of Hormuz.”
The FTSE 100’s detractors were found in the more cyclical technology and mining sectors. Trusts with exposure to US technology were among the hardest hit, while declines for Antofagasta, Anglo American and Fresnillo offset gains elsewhere.