The FTSE 100 sidestepped AI concerns on Tuesday as Unilever shares surged 6%, helping the index towards all-time highs.
London’s leading index was trading 0.5% higher at 10,836 at the time of writing.
The FTSE 100’s performance was in sharp contrast to sharp declines for US and Asian stocks that were hit hard by falling AI-related stocks.
“The AI powered rollercoaster has taken another lurch downwards, with chip stocks falling sharply, as investors reassess rising competition and future demand. Just as geopolitical tensions appear to be easing slightly, there’s been a refocus on the runners and riders of the tech revolution, with a new kid on the chip block causing mayhem,” said Susannah Streeter, Chief Investment Strategist, Wealth Club.
The NASDAQ is set to open lower after Korea’s KOSPI’s shed 10% and Japan’s index lost 4%.
But it was a much brighter picture in London, where the FTSE 100 was closing in on record highs as several companies released surprisingly good updates.
Unilever shares were 6% higher at the time of writing, taking them to the top of the leaderboard after the consumer goods giant announced the fastest increase in volume growth in over a decade.
Adam Vettese, market analyst for etoro, said: “Unilever shares jumped sharply this morning after the consumer giant delivered a far stronger first half performance than the cautious low end guidance had suggested.”
“The numbers delivered genuine volume acceleration that suggests the long promised shift from price led to demand-led growth is starting to stick. The real signal is not the headline growth itself, but the breadth and quality of it. Power Brands are pulling ahead decisively, emerging markets are doing the heavy lifting, and the business is delivering this while still protecting margins. It shows the portfolio simplification and sharper focus on fewer, stronger brands are beginning to translate into competitive momentum rather than just cost savings and buybacks.”
Barclays was the FTSE 100’s worst performer, losing 5%, after investors turned their noses up at interim results that failed to inspire confidence about the outlook for some areas of the business.
“Barclays’ interim results did not get the same warm welcome as those of Unilever, even though the bank’s second-quarter pre-tax profit of £3.2 billion beat the consensus forecast of £3.1 billion, the board sanctioned a huge increase in the dividend and topped up the share buyback programme by another £1 billion and boss C.S. Venkatakrishan raised profits forecasts for the year,” Russ Mould said.
“The indifference may lie with the mix of earnings and concerns over quality rather than quantity, as the investment bank provided the bulk of the upside profit surprise while the sale of an American Airlines co-branded credit card operation and the acquisition of Best Egg gave a bit of a messy feel to the numbers.”
Admirial was among the best performers after Citigroup raised their rating on the stock to neutral. Croda was 3.8% to the good on the back of decent interim results.
FTSE 100 results are coming thick and fast, with another busy schedule tomorrow.