The FTSE 100 neared all-time highs on Friday as London’s leading index once again demonstrated its prowess as a safe-have equity index—if such an equity index exists.

London’s weighting towards commodities and defensive sectors has enabled the FTSE 100 to grind higher this week during the furore surrounding Nvidia’s earnings. It is now less than 1% from all-time highs.

“The FTSE 100 creeps ever closer to its all-time high, after opening 0.3% higher in early trading,” said Matt Britzman, senior equity analyst, Hargreaves Lansdown.

“It’s a stark reminder that panicking doesn’t do investors any favours, after the global sell-off earlier in the month has largely been brushed aside. Expect to see some drifting on the margin, but there won’t be too many catalysts to move markets today, meaning there’s every chance this could be the third week of gains in a row for the UK’s largest index.”

China-focused stocks helped support the index on Friday, with miners and Asia-focused financials ticking nicely higher.

“This followed reports of reform in the Chinese mortgage market, which helped lift shares in the world’s second largest economy,” said AJ Bell investment director, Russ Mould. 

However, it was the UK property sector doing the heavy lifting as we headed into the weekend, with LondonMetric, Vistry, and Land Securities doing the heavy lifting. The latest Nationwide House Price Index showed average house prices have increased 2.4% over the past year, and the Bank of England announced mortgage approvals are at the highest level since 2022.

“In the UK, house prices rose at their fastest pace since the end of 2022 on a year-on-year basis but were down month-on-month to hint at the continuing pressures on purchasers from higher mortgage costs, Mould explained.

“The property market could get a renewed boost if the Bank of England opts to follow up its August interest rate cut with another reduction next month. Core PCE inflation data, the Federal Reserve’s preferred measure of prices, could offer some clues around the likely trajectory of rates across the Atlantic when it is released later today.”

Nvidia has undoubtedly been the world’s most closely watched stock this week.

Earnings released on Wednesday produced a disappointing reaction in the stock, but the results themselves were not a disappointment as they confirmed momentum in demand for chips was intact.

Expectations were high going into Nvidia’s earnings update this week, and anything less than a blowout to the upside was going to weigh on shares.

As the stock settles into a trading range, analysts at XS.com have provided technical commentary on the key levels for NVDA shares in the coming trading sessions:

“The better-than-expected report is likely to lead to price fluctuations with an upward bias, but the stock’s decline and breach of the 50-day moving average at $117.70 could result in further weakness,” said Rania Gule Senior Market Analyst at XS.com.

“Looking ahead to the medium and long term, the markets should respect four key technical price levels that may play a role if Nvidia’s shares continue to decline following yesterday’s strong earnings.

“The first support level is at $116. This area may provide initial support near the trendline connecting the May peak and the counter-trend price surge that occurred in early August. A move below this level could push the stock down to the $107 region, a key demand and reversal area on the daily chart between May and August.

“Further decline may lead to a retest of the crucial $99 level, where Nvidia shares are likely to encounter significant support near the March peaks, with the first of these peaks representing the previous all-time high for the stock.

“Lastly, it’s essential to watch the $91 zone, which is a lower price target for the descending column pattern from July to August, identified from the highest point of the recent price channel formation. Should such a move occur, it would confirm a descending channel pattern in the stock and could potentially lead to a retest of this month’s low at $90.70 in the medium term.”

Filtronic plc, a leading designer and manufacturer of products for aerospace, defence, space, and telecoms infrastructure markets, has announced a new production order from SpaceX valued at $8.4 million.

This order continues the demand for Filtronic’s E-band solid state power amplifier (SSPA) modules, crucial components in SpaceX’s Starlink satellite constellation.

The irrevocable order is set to be fulfilled in the calendar year 2025, prompting Filtronic to upgrade trading projections to be ahead of current market expectations for FY2025.

This latest contract win falls under the Strategic Partnership agreement signed in April 2024.

“We are delighted to receive another production order from our partner, SpaceX, as we continue to support the deployment of the Starlink constellation with E-band technology,” said Nat Edington, Chief Executive Officer of Filtronic.

The order has triggered SpaceX’s vesting of an additional 2,171,211 share warrants as part of the long-term partnership established between SpaceX and Filtronic earlier this year.

This brings the total number of vested warrants under the first tranche to 10,856,055, reaching the maximum 5% of the company’s share capital as stipulated in the agreement. With this milestone, Filtronic confirms that future E-band SSPA orders from SpaceX will no longer result in further warrant vestings under this tranche.

ECR Minerals looks set to be the latest natural resources junior to add a helium project to its investments.

Citing recent excitement in the share prices of companies that have pivoted towards helium, ECR wants a piece of the action and announced the expansion of its strategy to include US helium projects. 

A number of UK-listed shares that have hit a dead end with existing operations have shifted to helium to revive the company’s prospects.

ECR Mineral’s Chairman and Managing Director, Nick Tulloch has experience reinventing cannabis company Voyager Life as a helium play.

Voyager’s shares collapsed early in 2024 following a failed merger with another cannabis firm, and the company emerged as a helium producer. 

Helium has a wide range of medical and industrial applications and is important for space travel.

ECR Minerals says it sees value in selling and distributing helium in the US and will target only assets in production or with the potential for near-term production.

Comments accompanying today’s announcement highlight the difficulties of extracting helium, and the company made it clear it didn’t want to get involved in helium exploration.

“Although it is often tempting to think that the important part of developing a natural resources play is to find the resource, in fact we consider that it is production and sales that really define a company,” said Nick Tulloch, Chairman of ECR Minerals.

“There are many substantial resource deposits globally that are simply not economic – or possible – to extract and sell. This is particularly the case with helium. Despite its high value, it is not a straightforward element to process or transport.”

“Therefore, as we examine this possible expansion of ECR, it is critical that we source assets that are capable of near term production, and therefore sales, of helium and access to nearby infrastructure, both gathering lines and a processing plant, is a must.”

Touching on the funding of ECR Mineral’s expansion into helium, the company said it wouldn’t conduct a placing at a discount to the current share price.

The FTSE 100 has shaken off any concerns about disappointing Nvidia earnings and pushed higher on Thursday with banking and consumer stocks among the top risers.

Although Nvidia shares fell after the company announced results last night, the drop can be attributed to profit-taking rather than any major concerns with the numbers. There certainly wasn’t anything in the numbers to suggest the AI theme was coming to an end or that there was any slowdown in momentum.

“The FTSE 100 ticked higher despite a technology-led sell-off in the US overnight and a negative after-hours reaction to Nvidia’s results – the lack of tech stocks in the UK index proving a rare boon on Thursday morning,” said AJ Bell investment director Russ Mould.

“Consumer-facing names were getting some love from the market along with resources stocks on a quiet day in London for corporate news.”

We mentioned yesterday that the FTSE 100 has shown remarkable resilience throughout August’s volatility. Although there are many occasions that investors wish they had a greater weighting to US tech than FTSE 100, today’s 0.3% gains for the FTSE 100 is a reminder of the defensive nature of the index and its ability to preserve value when other markets are under the cosh.

Banks rebound

UK banks rebounded a day after a comment in an FT article suggested the Labour government could be eyeing up banking profits in their upcoming tax raid budget.

“UK banking stocks came under some pressure yesterday after reports suggested the new government may be looking at additional taxes on the sector,” said Matt Britzman, senior equity analyst, Hargreaves Lansdown.

“There’s precedent here, the sector already suffers from elevated taxes in the form of the bank levy and corporation tax surcharge. Details are thin on the ground but given any tax would likely be UK focused, this would impact domestic players like Lloyds and NatWest more so than those with a global presence.”

Any concerns about the impact of additional taxes were short-lived, as the government itself is yet to signal that it was planning additional taxes on banks. Lloyds shares rose 1%, and Barclays ticked 1.6% higher. After a strong rally in recent weeks, things could become very interesting for banking stocks should Rachel Reeves drop in any hints to back up yesterday’s jitters.

Diageo was the top faller after one of its peers posted soggy results. Diageo has released a series of disappointing updates, and it appears that peers are experiencing their problems, suggesting that its woes may persist.