The FTSE 100 rallied on Tuesday as investor sentiment improved globally amid a US tech rally and reports of talks between the US and Iran.
Iran has denied any talks are taking place, but investors seem happy to take the US President’s word for it and hope that the free flow of oil resumes before long.
London’s leading index was 0.3% higher at the time of writing as US futures rose.
“The FTSE 100 got off to a solid start on Tuesday following gains in US and Asian markets,” said AJ Bell investment director Russ Mould.
“Miners were higher in London, with performance also bolstered by some positively received corporate updates.
“Smith & Nephew was a notable laggard. The company seems to be in a permanent state of turnaround in recent years and delivered yet another disappointment as it lowered full-year profit guidance on weaker demand for hip and knee replacements in the US.
Smith & Nephew shares were 7% lower and firmly at the bottom of the leaderboard.
BP was among the gainers after reporting results showing the benefits of higher oil prices in the last quarter.
“Meg O’Neill’s first full quarter at the helm of BP has come alongside some bumper profits and a welcome reduction in net debt,” said Derren Nathan, head of equity research, Hargreaves Lansdown.
“While much of that has been down to high commodity prices, there’s been some strong strategic progress too as the company drives towards a simpler and more capital-efficient portfolio.”
Miners were a key driving force in the FTSE 100’s rally on Tuesday, with improved sentiment sparking interest in the sector. Antofagasta was the FTSE 100’s top riser, adding 4%.
HSBC slipped 1% despite announcing a 23% increase in profits and a fresh $1 billion share buyback.
Attention will be on the US again this week, and the US tech sector that has rebounded sharply in recent sessions and brought the entire global equity market with it.
“More globally, the lack of further strikes in the Middle East and a solid set of Palantir figures have helped to maintain the positive atmosphere,” said Chris Beauchamp, Chief Analyst at IG.
Looking ahead, Beauchamp pointed to US tech as a potential driver of markets as we move through August.
“The next few days may well provide us with a better clue on how the market evolves over August. While Iran rumbles away in the background, the recovery in tech seems to point towards a resumption of the earnings-driven rally.
“SpaceX’s numbers provide a potential bump in the road however, given the wide range of outcomes possible here. It’s usually a good idea to be wary in August given previous summer selloffs, but if oil prices remain contained then the optimistic tone of trading so far may well continue.”