The FTSE 100 made small gains on Tuesday as UK bond market volatility decreased and upbeat corporate earnings trumped negative ones, helping drive stocks higher.
London’s leading index was 0.1% at the time of writing as housebuilders rose and offset losses in BP and JD Sports. It wouldn’t be a surprise if gains turned to losses in the afternoon, with the bid ebbing as the session progressed.
“The FTSE 100 held firm despite headwinds from BP warning of lower production and weak refining markets and Reinet Investments selling an approximate 2% stake in cigarette-to-vaping group British American Tobacco,” said Russ Mould, investment director at AJ Bell.
“The warning from BP sours the recent recovery in its share price after a prolonged weak spell. Concern about the global economy puts a cloud over oil demand this year and BP’s latest update continues its bad run for news, having suffered impairments and warned of weak refining margins last year.
“Investors often think BP and its peers are well-oiled machines, pumping out oil and gas with ease and doling out endless dividends and share buybacks. In reality, they operate in a high-risk environment with unpredictable earnings.”
BP shares slipped 2.4%.
Persimmon was the top riser after announcing a 7% increase in completions and rising average sales prices. Investors were evidently pleased that the strong performance led the board to guide profit before tax at the top end of the range for the full year as shares rose by over 5%.
“Persimmon’s 2024 trading round-up showed it’s sitting on solid ground, despite the group having faced its fair share of struggles in recent years,” said Aarin Chiekrie, equity analyst, Hargreaves Lansdown.
“From their peak, both volumes and operating margins have fallen much harder than the broader sector. But Persimmon looks to have turned a corner. New home completions and average selling prices both exceeded market expectations, up around 7% and 5% respectively last year, as buyer demand was consistently higher throughout 2024. That’s given the group a solid platform to build on over the rest of 2025.”
Persimmon, like many listed housebuilders, has experienced a slow rot in its share price over the past year, and today’s news has provided a catalyst for a bounce off key support around the 1,000p.
Taylor Wimpey and Barratt Redow rose in sympathy and helped carve out gains for the FTSE 100.
JD Sports fell 8% and was the FTSE 100’s biggest faller after further reducing their profit guidance amid challenging trading conditions.
“JD Shareholders have had a tough 12 months as it is, and unfortunately this morning’s update has added more fuel to the fire. The company has warned on profit, bringing the top end of guidance down by 100 million amid challenging and volatile conditions,” said Adam Vettese, market analyst at investment platform eToro.
“It’s seems the supermarkets were the exception rather than the rule when it comes to retail performance over this past Christmas, as JD struggled in November and December, dashing any hopes of saving an already poor year.”