The FTSE 100 gained on Friday as bargain hunters stepped into beaten-down names after a week of heightened volatility, which was largely caused by a selloff in US technology shares.
London’s leading index was 0.9% higher at the time of writing and was actually set to close the week out higher.
The resilience of the FTSE 100 was apparent this week, as losses in UK stocks driven by concerns about a US technology selloff were mostly contained and were quickly bought into by traders seeking shelter in pharmaceutical names and commodities.
Earnings season is well underway, and the results kept coming on Friday with NatWest, SEGRO and Rightmove among the FTSE 100 companies reporting. Generally strong earnings from FTSE 100 firms this week helped the index outperform as US indices were hit by a rotation out of tech and mainland Europe was ravaged by a luxury rout.
NatWest was the FTSE 100’s best-performing stock of the session after the bank beat estimates and increased its dividend. NatWest’s report was very similar to Lloyd’s report yesterday in that half-year profits declined, and Q2 profits were much lower than last year. However, NatWest’s Q2 results showed a mild improvement on Q1, which sparked a 6% rally in the stock.
“NatWest’s long, long recovery from the financial crisis looks as meaningful as it has done at any point in the last 16 years or so with the company’s latest results including plenty to like from the point of view of shareholders,” said AJ Bell head of financial analysis Danni Hewson.
“Unlike Lloyds, whose own better than expected numbers received a muted response from the market, NatWest is not only benefitting from lower impairments but also higher than anticipated income and the company not only beat on the second quarter but it is lifting guidance for the full year too.
“Notably the company is feeling confident to go on the offensive – boosting its position in the UK mortgage market with the acquisition of a chunky portfolio from Metro Bank. This follows on from the recent purchase of Sainsbury’s Bank.”
Rightmove carved out a 0.4% gain after profits crept higher in the first half, but using underlying activity on the platform remained broadly flat.
SEGRO was firmly at the bottom of the leaderboard after the REIT said its NAV declined by 1.8%. SEGRO shares were down 2.2% at the time of writing.