The FTSE 100 rose to within touching distance of record highs on Thursday amid strong earnings and a jump in oil prices following Trump’s announcement of fresh sanctions on Russia.
London’s leading index was trading 0.6% higher at the time of writing.
UK investors enjoyed a plethora of encouraging earnings and trading updates from the FTSE 100 companies on Thursday, with Rentokil Initial and the London Stock Exchange Group among the best performers.
Higher oil prices played a part in the FTSE 100’s rally after Donald Trump targeted Russian oil producers with fresh sanctions, helping BP and Shell rise by between 3% and 4%.
“Oil markets have spiked higher after news emerged that the US was putting Russia’s major oil producers, Rosneft and Lukoil, under sanctions due to the Kremlin’s failure to move toward peace in Ukraine,” said Steve Clayton, head of equity funds, Hargreaves Lansdown.
“Brent crude has climbed 4% to almost $65 per barrel on the news, marking a dramatic recovery from recent weakness in crude markets. America’s new stance is in stark contrast to recent messaging from the White House and took markets by surprise. The effectiveness of the sanctions is yet to be proven, but President Trump has said that the Indian PM Narendra Modi has assured him that India will cease Russian oil purchases.”
The heavy weighting of Shell and BP played a leading role in the FTSE 100’s rally on Thursday. Their rally was compounded by favourable reactions to earnings for Rentokil Initial and the London Stock Exchange Group.
Rentokil was the FTSE 100’s top gainer after the pest control group signalled improvement in its North American business.
“Rat-catcher Rentokil surged after saying its US operations were in a much better place,” said Russ Mould, investment director at AJ Bell.
“The company had previously suffered from slower than expected growth in North America, causing investors to question if the 2022 acquisition of US pest control firm Terminix was ill-timed. A new game plan appears to be working, and Rentokil is now more upbeat on the region.”
Rentokil shares were 11% higher at the time of writing.
The London Stock Exchange Group gapped higher on a strong trading update in which EBITDA guidance was increased.
“LSEG shares are up 6% after reporting a strong period of growth, a boost to margin guidance accompanied by news of an investment by a consortium of banks into its Post Trade Services division and a new £1 billion share buy-back programme,” Steve Clayton said.
Unilever and Lloyds also reported on Thursday, but their updates were met with muted reactions. Lloyds confirmed the impact of the motor finance scandal, while Unilever posted reasonable volume growth.