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.”

Ocado has reported its strongest-ever Christmas trading period, capping off a successful fourth quarter that saw retail revenue surge by 17.5% to £715.8 million.

The company has had its critics, and these results should go a long way to temper their negativity.

The joint venture between Ocado Group and Marks & Spencer enjoyed robust growth in its active customer base, which expanded by 12.1% to reach 1.1 million customers.

The company’s strategic focus on offering unbeatable choice, unrivalled service and competitive pricing has paid off, with customers shopping more frequently throughout the key festive trading period. TV adverts explaining the reasonable value of Ocado’s service and price matching against Tesco has worked.

Average orders per week climbed significantly by 16.9% to 476,000, whilst maintaining stable basket sizes of around 44 items.

Ocado shares surged 10% in early trade.

During the festive season, Ocado’s comprehensive Christmas range proved particularly popular with shoppers. The M&S party food selection was a highlight, with items such as hot honey halloumi and pigs in blankets drawing considerable interest. The company also saw strong performance in its premium cheese offering, including selections from Paxton and Whitfield, whilst noting a growing trend in low and no-alcohol beverages over the Christmas period.

Ocado said the strong festive period is set to continue into FY2025 and will provide further guidance when full-year results are released in February.

Operational efficiency showed marked improvement, with the company’s Customer Fulfilment Centres (CFCs) exceeding their design capacity during the peak Christmas period. The newest facility in Luton achieved 269 units per hour, contributing to a network-wide efficiency increase of 15% compared to the previous year.

“2024 was a year of strong growth. In the fourth quarter, we accelerated sales again – reaching 500,000 orders per week for the first time, at the end of November,” said Hannah Gibson, Ocado Retail’s Chief Executive Officer.

“We’ve achieved this growth by being laser focused on customer service and delivering unbeatable choice, unrivalled service and reassuringly good value to the households and families that we serve. We’ve made a series of significant improvements  – including making sure customers can buy all their favourite M&S products, ensuring our service is near perfect, shifting our value perceptions as customers realise how much we’ve moved on price and helping new customers discover Ocado.

“As we enter the next phase of our strategy, we are excited about the future of online grocery and our role in shaping it. Priorities for this year are raising the bar again in our leading customer proposition, making further progress on improving profitability and transitioning the business onto new technology platforms.”

The FTSE 100 fell on Monday as pressure on UK assets continued following a broad sell-off in US equities after the release of December’s Non-Farm Payrolls.

The downward spiral in UK bonds and the pound has accelerated since the US jobs number which suggests the Federal Reserve will be in no rush to cut rates and may not amend rates until late 2025.

“Equity trading on the London market has got off to a subdued start as investors continue to assess the implications of turmoil on the bond markets and the outlook for the global economy.  Friday’s jobs figures showed the US economy is more resilient than expected, quashing hopes for multiple interest rate cuts from the Federal Reserve this year,” said Susannah Streeter head of money and markets, Hargreaves Lansdown.

Streeter continued to explain how developments in the US were making the UK effectively powerless against the factors causing volatility in UK assets.

“With the dollar strengthening against a basket of currencies it also runs the risk of higher inflation being exported, due to the higher cost of imports, adding to headaches for other central banks. UK government borrowing costs have crept up even higher, with the yield on 10-year gilts nudging 4.9%, a highly unwelcome hurdle, levels not seen since the Great Financial Crisis.”

Higher bond yields will be a major concern for investors in most industry groups, baring the banks that enjoy higher interest rates.

That said, the visible positioning moves made to portfolios by selling down utilities and retailers and buying banks last week were less pronounced on Monday.

However, the falling pound failed to inspire any major buying activity in London’s leading stocks, leaving the index languishing in negative territory.

“The dollar is flexing more muscle amid expectations that borrowing costs will stay higher for longer, helping push down the pound to $1.21 levels not seen since October 2023.  Sterling has also dipped against the euro to 1.18. It comes amid ongoing concerns about the outlook for the UK economy, with the spectre of stagflation hovering,” Streeter said.

IAG was among the top fallers as investors booked profit after a steady ascent for the share price in recent months. Surging oil prices may have prompted some investors to take profit in IAG as fresh sanctions on Russia sent WTI oil 2% higher.

“Crude oil futures continued to advance, driven by expectations that expanded U.S. sanctions could disrupt Russian crude exports to key buyers, China and India,” said Joseph Dahrieh, Managing Principal at Tickmill.

“The sanctions target major Russian oil producers and vessels involved in transporting Russian oil, aiming to reduce Moscow’s oil revenue. This reduction in Russian exports could push global crude prices higher at least in the near term, as the market adjusts to the loss of supply from one of the world’s largest oil producers.”

London’s weighting towards oil helped the FTSE 100 outperform European indices with BP and Shell gaining more than 1%.