The FTSE 100 scaled fresh record highs on Thursday and edged towards 11,000 as corporate earnings lifted the index.
It was another busy day for FTSE 100 earnings updates on Thursday, with Rolls-Royce, Howden Joinery, London Stock Exchange Group, and Hikma reporting results.
The balance of Thursday’s earnings updated was positive, and London’s leading index rose 0.15% to 10,819.
“The FTSE 100 is on quite a run and drawing ever closer to the 11,000 level,” says Dan Coatsworth, head of markets at AJ Bell.
“Advancing once again, the blue-chip UK index has this time been propelled by superstar engineer Rolls-Royce which is going from strength to strength, and London Stock Exchange Group staging a recovery.
“Kitchen seller Howden Joinery also continued its run of quietly getting on with the job and then reminding the market it can still take a step forward in a difficult market.”
However, the FTSE 100 was kept in check by a lacklustre market response to Nvidia’s strong results, which hinted at ongoing nervousness about how the AI story would play out.
“Nvidia delivered another standout quarter, reinforcing its reputation as one of the market’s most consistent outperformers,” said Daniela Hathorn, senior market analyst at Capital.com.
“Revenue and earnings comfortably beat expectations, driven once again by stronger-than-forecast data centre sales. Margins also came in firmer than feared, easing concerns that aggressive scaling and rising input costs would begin to erode profitability.”
But while investors treated bumper Nvidia results with caution, UK-focused investors were more than happy to bid Rolls-Royce shares higher after the engineering firm reported a 40% jump in underlying operating profit amid strong performance in its aerospace and power divisions.
Chris Beauchamp, Chief Market Analyst at IG, said: “Rolls-Royce has managed to do what Nvidia couldn’t – engineer a share price bounce following results.”
“The share buyback provided the magic sauce for today’s surge to fresh highs, since, like Nvidia, the strong earnings backdrop was already expected by investors. Plus there seems to be an unending appetite right now for FTSE companies, as the index’s march towards 11,000 proves. It looks like the FTSE 100’s version of Nvidia will keep delivering for investors, as it responds to renewed demand for defence spending across Europe and a fresh ramp up in US outlays on the way too.”
Rolls-Royce shares were 6.5% higher at the time of writing.
Howden Joinery was the FTSE 100’s top gainer after capturing more market share in challenging market conditions. Shares were 7% higher.
The London Stock Exchange Group was also among the risers after announcing a 56% increase in profit before tax that resonated with investors looking for reassurance amid AI disruption fears.
“London Stock Exchange Group (LSEG) looks to be in defensive mode after becoming the target of activist investor Elliott,” Dan Coatsworth said.
“The tone of its results is one of a business trying to convince the market (and Elliott) that it is doing much better than its share price would suggest.
“Banging the drum to say it has consistently met or exceeded medium-term guidance set out in 2023 is LSEG’s way of trying to prove it is not dragging its heels.”