The FTSE 100 had a choppy end to the week, with concerns about tariffs and AI-related US stocks offsetting some very respectable earnings updates from London-listed large caps in early trade.
London’s leading index fell sharply on the open, but dip buyers quickly bid the market up as the session progressed, and the index was trading 0.3% higher at the time of writing.
“The countdown to Trump’s tariffs coming into force is now in the final few days and investors have got the jitters,” said Russ Mould, investment director at AJ Bell.
“Trump likes to make threats and stand his ground, hoping the other side blinks first and doesn’t put up a fight. The tariff recipient countries will be working hard over the weekend to finalise their game plan – do they retaliate or not?
“This uncertainty has unnerved markets and we saw a big sell-off on Wall Street last night, including what turned out to be a miserable day for Nvidia. The chip giant ended the day more than 8% lower as its results failed to reassure investors that it can fight off growing competition and deal with customers either going it alone or seeking solutions to reduce their overall AI costs.”
Nvidia’s results beat expectations, but the forward-looking nature of markets and the rich valuations of Nvidia and other tech shares mean the slightest threat to the AI rally is met with broad selling of US tech that spills over into global stocks.
That said, S&P 500 futures had stabilised on Friday, providing a base for the FTSE 100 to rally as positive corporate stories took control.
IAG was one of the standout performers after the airline said full-year revenue grew 9% and free cash flow expanded dramatically despite making significant investments in the business.
IAG shares were 5% higher at the time of writing.
“British Airways owner IAG smashed market expectations in the final quarter, delivering beats on both the top and bottom lines,” said Aarin Chiekrie, equity analyst, Hargreaves Lansdown.
“The group’s market-leading networks, strong brands, and fierce operational focus continue to drive performance skyward. Despite increased capacity, planes are flying with more passengers on board on average. That shows demand for the group’s routes remains strong despite the current pressure on consumers’ incomes.
“With its London base, IAG has a high share of premium passengers relative to other airlines, given London is the global leader in arriving and departing premium passengers. These customers are more willing to pay extra for a better seat, which is helping to boost margins.”
Housebuilders were higher after Nationwide said house prices rose 3.9% in the year to February. Persimmon rose 3.4% while Berkeley Group gained 1.8%.
An upbeat outlook from Rightmove in its full-year results helped its own stock 3% but also lifted sentiment for the sector.
US PCE data and its assessment of inflationary pressures due for release on Friday could upset markets as we head into the weekend.