The FTSE 100 rose on Friday as strong results from AstraZeneca helped boost the index despite sharp declines for US stocks.
AI fears are rocking major US indices, but the FTSE 100’s defensive nature drove outperformance as the index rose 0.4%.
“The FTSE 100’s lack of tech exposure has proved to be a blessing in disguise,” says AJ Bell investment director Russ Mould.
“The UK index is standing tall amid a global tech sell-off. Helped by record profits for index heavyweight BP and a well-received update from pharma giant AstraZeneca, the index managed a healthy gain on Friday. This followed heavy selling on Wall Street and parts of Asia as fears about AI spending intensify.
“Companies seen as victims of AI disruption in the software and data space, including Sage and Relx made progress, to outweigh a weak showing from miners and London’s limited contingent of tech and AI-related plays. Miners are linked to the AI theme as copper is a key component for data centres.”
RELX jumped 3.4% while Experian added 3.2%.
BT was the FTSE 100’s top riser after reports emerged it was nearing a deal with Virgin Media O2 to use BT’s broadband. BT shares were 6% higher.
BP followed Shell’s recent report in announcing bumper cashflows from higher refining margins amid the elevated oil price environment. But the focus on debt rather than shareholder distribution led to a fairly tepid market reaction.
“Shareholders might have hoped outsize profits and cashflows might would mean bumper dividends and buybacks. Instead BP has decided pick up the tab for the past. Net debt reduction targets have now been reached, and the company announced its intention to use further excess cashflow to fulfill settlement commitments related to the Deepwater Horizon tragedy 2010,” said Duncan Ferris, Analyst, Freetrade.
“Beyond this, the business is in a state of flux, planning to back out of its historic North Sea home, exit US biogas assets and otherwise streamline. A report this week from Semafor even suggested some board members want the business broken up, though BP was quick to rubbish this.”
AstraZeneca shares ticked 4% higher as the pharma giant reassured the market it was still sufficiently diversified to produce growth.
Adam Vettese, market analyst for etoro, said: “AstraZeneca shares rose at the open as the market digested a set of results that showed the company can still grow even as one of its biggest products fades.”
“Farxiga is now facing generic competition in the US, yet total revenue still advanced 7 per cent at constant exchange rates and core earnings rose in the mid-teens. The growth came from the parts of the business that matter most for the next decade; oncology, rare disease and respiratory medicines.”
NatWest tumbled to the bottom of the FTSE 100 leaderboard as its showed signs of falling behind other FTSE 100 in terms of growth.
“Judged on growth, NatWest fared worse than its peers, reporting minimal change in third quarter profit. That is a disappointment to investors given the favourable interest rate backdrop,” Russ Mould said.