The FTSE 100 ticked higher on Tuesday as investors held off on making big bets ahead of possible talks between the US and Iran.
Trading higher by 0.1% at 10,621, London’s leading index seems pretty comfortable in a range within touching distance of 10,600 as investors await a fresh catalyst.
This may come in the form of developments in talks between the US and Iran. With a ceasefire deadline set to expire tomorrow, Trump is warning that he will not extend the deadline, and Iran has alluded to ‘new cards’ to use on the battlefield, should the conflict resume.
But the market seems ambivalent to the risks of a return to fighting in the Middle East, which could prolong the oil crisis and spur inflation and is looking to possible talks in Pakistan as a reason to be positive.
“Oil prices remained below $100 a barrel which suggests cautious optimism that the Middle East conflict won’t intensify. However, the longer oil remains in the 90s range (currently $95), the higher the chance of an inflationary shock and a wobble to global economic activity,” said Russ Mould, investment director at AJ Bell.
Although oil prices were still close to $100, price action has calmed down, and that, in itself, is proving to soothe equity investors. Most FTSE 100 stocks were higher at the time of writing, with retailers and financials having a good session.
SSE was the FTSE 100’s top riser, up 4%.
British land was 2.2% higher after releasing positive rental and revenue growth in Q4 powered by fresh demand from AI-related tenants.
“The landscape is now evolving with more people returning to the office, and demand picking up from tech firms,” Russ Mould said.
“British Land is well placed to benefit, and that is evident from its bullish update. Upgraded earnings guidance implies strong momentum in the business. This is the type of news that’s needed to finally breathe some life back into its share price.”
Housebuilders were among the fallers as the sector fell in sympathy with a dismal update from Crest Nicholson, which fell 39% on Tuesday after slashing its outlook.
Persimmon was down 0.6%, and Barratt Redrow lost 0.3%.
AB Foods was the FTSE 100’s top faller on Tuesday after it released disappointing interim results and confirmed it would demerge Primark.
Robinhood UK lead analyst Dan Lane, said: “The headline figures paint a picture of flat revenues and profits under pressure but the real story is Primark about to stand on its own two feet.”
“Go back through previous results and you start to see Primark has been driving 50% of Group revenues but around 70% of profits so this gives the Group’s favourite child a chance to perform without the drag of some other slower-moving segments.
“But, while Primark is undoubtedly the jewel in ABF’s crown, if it is to be judged on its own merits soon, it will give up the supportive scaffolding of the other units. Yes, grocery has been consistently low margin, sugar volatile, and ingredients and agriculture too small to move the dial, but they have provided ballast when Primark hasn’t offered star power.”
AB Foods was down 3% at the time of writing.