The FTSE 100 traded sideways on Tuesday as the index continued to consolidate a record-breaking rally amid strong Vodafone results and developments in the Anglo American takeover battle.
Investors did not have many macro influences to trade off on Tuesday, leaving the index to drift 0.1% higher at the time of writing.
“After the stellar run which took it to all-time highs the FTSE 100 now seems stuck in a holding pattern – awaiting the next catalyst which could either send it higher or lower,” said AJ Bell investment director Russ Mould.
The void of macro-based trading impetus was filled by a string of corporate updates from FTSE 100 companies on Tuesday.
Anglo American
BHP’s interest in Anglo American is turning out to be a real saga.
Anglo American was down again on Tuesday after rejecting a revised bid from BHP yesterday and followed with the announcement of a strategy to divest parts of the group, including diamond miner De Beers, on Tuesday.
“Anglo American was one of yesterday’s bigger fallers, down 2.4%, after news emerged that a revised all-share takeover proposal by suitor BHP, had been unanimously rejected by Anglo’s Board,” said Derren Nathan, head of equity research, Hargreaves Lansdown.
“This may not be the last twist in this tale, with rival Glencore also thought to be casting an eye over Anglo’s diverse mining properties. Anglo won’t go down without a fight though and has set out its strategic vision this morning to focus on world class assets in copper, premium iron ore and crop nutrients, with plans afoot to exit or demerge coal mining, nickel, platinum and the iconic De Beers diamond operations.”
Vodafone
Vodafone was among the best performers on the day, with a 3.2% gain after announcing strong revenue growth in Q4 as the CEO’s transformation plans started to bear fruit.
The news can’t come soon enough for investors who have faced persistent share price declines amid falling sales growth.
“It’s fourth quarter to the rescue for Vodafone, as growth starts again,” said Matt Britzman, equity analyst, Hargreaves Lansdown.
“It’s taken all year, but revenue growth across all segments in the final quarter was exactly what Vodafone needed to deliver. After shipping off underperforming businesses, Vodafone can now focus on growing its core markets, but investors will need to accept the fact that it’s now a smaller business. That impacts the dividend, now set at a base of 4.5 cents per share for 2025, half of what the group delivered for the year just gone.”
Burberry was the top riser, gaining 3.4%, ahead of results later in the week.