The FTSE 100 reversed early losses on Tuesday after traders bought into a sell-off in mining companies in the very early hours of the session. Strong results from Compass Group helped the index carve out gains.
Having touched lows of 8,152, the FTSE 100 rebounded to trade at 8,226, 0.3% higher on Monday.
“The FTSE 100 was dragged down by a poor showing from the mining sector off the back of a weak copper price,” said Dan Coatsworth, investment analyst at AJ Bell.
“Copper futures have fallen by nearly 7% over the past five days amid concerns about sluggish demand from China as it struggles with a slowdown in economic growth. The market has taken the view that China isn’t digging deep enough with stimulus measures to fire up the economy and therefore commodities demand is at risk.”
However, concerns about China took a back seat as the session progressed, and investors shifted their attention to Compass Group’s strong earnings and a reassuring statement from Beazley.
Compass Group was the FTSE 100’s top riser after delivering a very respectable 10.3% increase in organic revenue in its third quarter, helped by strength in North America and Europe. The food services company upgraded its profit outlook, saying it expected operating profit growth for the year would be above 15%, and shares reacted accordingly with a 4% increase.
“Food service giant Compass continues to attract new business at pace, helping to support a second upgrade to annual forecasts this year,” Coatsworth said.
“This suggests the company’s decision to ease prices in line with inflation is a good one as it helps drive loyalty among existing customers and attract new ones, bolstering an already strong market position. It also suggests a return to the office – as hybrid working policies are adjusted – is proving beneficial.
“The company and its management team see plenty more business to go after, with a large chunk of catering still done in-house.”
Beazley was the second-highest riser after issuing a statement to calm any fears about the impact of last week’s tech outage. The cyber security insurer’s shares were hit heavily by concerns it would have to fork out for claims but today said its guidance for the year remained unchanged by the events.
The bottom of the leaderboard was littered with miners such as Anglo American, Glencore and Rio Tinto as the impact of commodities selloff lingered.