The FTSE 100 had a spring in its step on Tuesday as positive corporate updates drove the index higher.
In addition to strong earnings from the likes of BP, Diageo and Smith & Nephew, equity markets benefited from investor positioning for more interest rate cuts this year in the wake of soggy US jobs data.
“Markets spent little time absorbing last Friday’s payroll shock,” explained Ahmad Assiri Research Strategist at Pepperstone.
“After the headline jobs miss nudged investors toward trimming size positioning, the play has shifted into a more defensive gear across assets yet with a growing conviction that the Fed will soon extend a policy safety net with two or three rate cuts by year end.”
London’s leading index was trading higher by 0.3% at 9,156 at the time of writing.
Smith & Nephew led the index higher as the medical technology company surged 15% to the highest levels since 2023 after reporting a 30% increase in operating profit in the first half.
“Smith & Nephew seems as if it’s been on the waiting list for a recovery for a long time but its latest results suggest it may now firmly be on the mend,” AJ Bell investment director Russ Mould said.
“Strong growth and rising profitability and cash flow, as well as a meaningful share buyback, are all big ticks in the box for the company.”
Mould also highlighted Fresnillo’s operational progress as the stock rose 5% on Tuesday. Fresnillo was one of the FTSE 100’s to go selections during the height of 2025’s uncertainty, and the stock’s gains year to date have been justified by EBITDA rising 102% in the first half of 2025.
“Fresnillo has got a big boost from higher precious metals prices in 2025 as investors have sought out gold’s safe haven attributes amid significant economic and geopolitical uncertainty,” Mould said.
“However, its latest results show the company is also doing well operationally and keeping a tight rein on costs, allowing its shares to sparkle this morning.”
BP shares touched their highest point since the announcement of Donald Trump’s tariffs after releasing Q2 2025 results, which went a long way to reassuring investors of the company’s trajectory.
“BP delivered a solid performance in Q2 2025, showing it is regaining momentum after a shaky few years. Profits nearly doubled from the previous quarter thanks to strong oil trading and a rebound in refining margins, despite weaker oil prices,” said Lale Akoner, global market analyst at eToro.
“The company continues to cut costs and improve efficiency, which helped lift cash flow and fund a generous $750M share buyback. Notably, BP’s retail and Castrol businesses saw strong growth, showing resilience beyond just pumping oil. A major new oil discovery in Brazil also highlights renewed exploration success.”
BP shares were 2% higher at the time of writing.
Diageo investors were also in need of reassurance going into the alcohol giant’s preliminary results. A headline revenue decline of 0.1% and a 27% drop in operating profits were disappointing but well telegraphed.
Cost-cutting measures provided some solace, and shares rose 3%.