The FTSE 100 was treading water on Tuesday as investors braced for major corporate and monetary policy events later in the week.
It could be a big week for equity markets, with Nvidia set to report results and the Fed Chair potentially setting the tone for interest-rate expectations.
With such events on the horizon, it’s understandable that many investors sat on their hands on Tuesday.
“Markets are in wait-and-see mode, as stricter US sanctions on Iran take hold and investors wait for the latest snapshot of demand for AI infrastructure from tech giant Nvidia,” said Susannah Streeter, Chief Investment Strategist, Wealth Club.
Streeter continued to explain that the FTSE 100 has held up well against a backdrop of mounting concerns that have weighed on other global equity markets.
“The London market is proving remarkably resilient given the cocktail of geopolitical tensions, stubborn inflation concerns and uncertainty over the path of interest rates. The Footsie’s relatively low exposure to the tech sector is also helping it avoid some of the turbulence rippling through global tech shares, giving investors a different mix of sectors to rely on,” Streeter said.
There were few major FTSE 100 movers on Tuesday with most stocks moving less than 2%.
Melrose was the FTSE 100’s top gainer after the group announced that a US court had ruled, drawing a line under an incident earlier this year. Melrose shares soared 8% on Tuesday.
“A chemical incident at a Melrose-owned facility in California will cost the company up to $100 million in compensation and potentially more in lost earnings,” said Russ Mould, investment director at AJ Bell.
“The threat of a chemical tank explosion at the GKN Aerospace manufacturing centre saw tens of thousands of people evacuated from the surrounding area. Melrose is now counting the cost of this incident, including hotel bills and loss of wages for those upended by the drama.
“It’s an unfortunate event for Melrose but importantly there will be no criminal charges brought against the group. That means the industrial investor has escaped with a bruised reputation and is only out of pocket temporarily.
“The priority now is to ensure that safety standards are improved, otherwise Melrose could have much bigger problems on its hands.”
JD Sports shares were hit with a price target downgrade by RBC, which sent shares lower by 1.5% and at the bottom of the leaderboard.