The FTSE 100 shrugged off falling oil stocks on Tuesday as stronger pharma firms helped keep the index positive.
London’s leading index seems content to hover above the 10,700 mark as investors await the next major catalyst, having hugged the level through most of September and taking elevated oil prices and AI wobbles in its stride.
The index was trading 0.3% at the time of writing.
“Despite rising oil prices and bond yields and selling in Asia, UK stocks made decent progress,” said AJ Bell investment director Russ Mould.
“Mining stocks did a lot of the heavy lifting as they recovered some of their recent losses. Utilities firms were headed in the other direction as investors reacted to news of Andy Burnham’s unveiling of GB Grid – a state-backed body intended to invest in the grid.
“While the market reaction suggests this is not considered to be an existential threat just yet, there will be concern that this is the first step on the road to renationalisation of the electricity network and the country’s wider energy infrastructure.”
Centrica fell 0.3%, while National Grid was almost flat.
Pharmaceutical companies were the index’s main source of support on Tuesday, with GSK and AstraZeneca gaining around 2%. They were modest gains, but the firms’ weighting kept the index marginally higher. ConvaTec shares rose 3%.
AstraZeneca’s 1.8% came on the back of an investment in Summit Therapeutics, which investors hope will help bolster the drug company’s pipeline.
“AstraZeneca is constantly looking for ways to develop its pipeline of new drugs and to bring more effective treatments to market,” Russ Mould said.
“The latest step forward is a $2 billion investment in Summit Therapeutics and a collaboration on developing gastrointestinal cancer treatments. In doing so, AstraZeneca provides important funding to Summit to accelerate its work.
“Taking a stake in a partner is common in the pharma and biotech space, with the larger party effectively getting a seat at the table and being in prime position for a potential buyout down the line.”
Industrial metals miners also helped provide some positivity on Tuesday as Anglo American and Antofagasta ticked higher.
Ithaca Energy was the FTSE 100’s top loser, down 4.1%.