FTSE 100 jet engine manufacturer Rolls-Royce shares were up to approximately 4% on Tuesday as the company announced its decision to cut up to 2,500 employees worldwide- an 8% workforce reduction.

Rolls-Royce shares were up 0.4% at the time of writing on Tuesday.

The Derby-based company employs up to 42,000 employees in up to 50 countries.

“We are building a Rolls-Royce that is fit for the future. That means a more streamlined and efficient organisation that will deliver for our customers, partners and shareholders,” said Tufan Erginbilgic, Chief Executive of Rolls-Royce.

The decision to cut employees was made in light of the company’s ongoing restructuring programme, which seeks to optimise workflow efficiency by shedding employees. Over the past 10 years, Rolls-Royce has seen more than 13,000 employees go as part of restructuring programmes. 

Russ Mould, Investment Director at AJ Bell, said that “we’ve seen the classic share price move higher on job cuts’ movement in Rolls-Royce’s restructuring efforts. While not good news for people working for the engineer, cutting jobs means saving money in the future, hence why the market has given it the thumbs-up.”

Investors rotated into FTSE 100 stocks with defensive attributes on Tuesday as London’s leading index gained for a second consecutive day.

Tensions in the Middle East drove a risk-off tone in equities, and buyers jumped into utilities, pharmaceuticals and energy firms.

The defensive characteristics of the FTSE 100 as an index were highlighted with a 0.4% gain, while other European indices fell.

Severn Trent, United Utilities and AstraZeneca were the top risers with gains between 2%-3.5%. AstraZeneca is the FTSE 100’s second-largest company and added a significant number of points to the index.

The risk-off tone was further demonstrated by declines in cyclical sectors, including miners and consumer discretionary stocks.

There was interest in UK-facing stocks after news UK wage growth exceeded inflation for the first time in two years helped interest rate-sensitive sectors. Housebuilders were among the top risers.

“The headline grabber will undoubtedly be the news that average pay growth has outstripped inflation for the first time in almost two years. It means hard working Brits should begin to feel the benefit of those extra pennies in their pay packets when doing the household budgets,” said Danni Hewson, AJ Bell head of financial analysis.

“But it’s important to note this is an average number. Not every worker will have had a pay rise and there are clear differences between the public and the private sector.

“What the Bank of England’s MPC members will be considering is that though pay growth is high it isn’t rising as quickly as it had been.”

To deliver their Generative AI-enabled smart eyewear to a broader market, Innovative Eyewear rhas eleased a new range with several improvements and new features.

Tekcapital’s portfolio company Innovative Eyewear has launched the Lucyd Lyte XL range of glasses addressing customer feedback, including demand for more varied sizes.

The range also encompasses Lucyd’s patent-pending spring hinges and enhanced audio and call quality.

Tekcapital said the Lyte XL collection will be launched on Lucyd.co and Amazon.com today.

“The Lyte XL collection is the culmination of years of smart eyewear R&D, and addresses several key points of consumer feedback on our products. We are very pleased to present our most comfortable, best-sounding and most durable smart eyewear yet,” said Harrison Gross, CEO of Innovative Eyewear Inc.

“We are continuing to enhance the Lucyd line to deliver the most comfortable, functional, and fashionable smart eyewear. Be sure to download our free Lucyd app to access the power of ChatGPT on our smart eyewear.”

Tekcapital investors will also be looking forward to the launch of Nautica, Eddie Bauer and Reebok licensed smart eyewear in the coming months.

Poolbeg Pharma has signed a strategic collaboration agreement with a Nasdaq-listed biopharmaceutical company to develop an optimised oral drug for a metabolic condition using Poolbeg’s licensed oral delivery technology, the companies announced Tuesday.

Poolbeg Pharma shares were 8% higher at the time of writing on Tuesday.

The companies will work together to produce a prototype drug utilising Poolbeg’s technology to optimise the delivery of the Nasdaq company’s novel drug to its ideal therapeutic site.

Poolbeg believes the collaboration could expand to a full licensing agreement allowing the Nasdaq company to integrate the oral delivery technology into its pipeline.

Poolbeg said the agreement marks a milestone and represents a step toward early revenues and advances the company’s commitment to developing treatments for metabolic conditions.

Under the deal, Poolbeg will receive funding to collaborate on producing the prototype oral drug.

Jeremy Skillington, PhD, Chief Executive Officer of Poolbeg Pharma, said: 

“Our partner recognises the benefits of Poolbeg’s licensed oral delivery technology and we look forward to optimising the development of this innovative drug for patients in an area where there is a clear unmet need. We are optimistic that this strategic collaboration has the potential to progress to a full licensing agreement.”

The FTSE 100 edged higher on Monday in tentative trade as investors awaited further geopolitical developments and geared up for the US earnings season.

The FTSE 100 was up 0.3% to 7,624 at the time of writing on Monday.

“A mute start to the week for European indices suggests a sense of nervousness, particularly as the US reporting season gets underway and investors worry about a cautious tone in corporate outlooks,” said Russ Mould, investment director at AJ Bell.

“The FTSE 100 was flat…with strength in retail and mining stocks offset by weakness in pharmaceuticals amid negative read-across from Pfizer’s weak update.”

Investors are preparing for earnings updates from US companies including Tesla, Netflix, Goldman Sachs and Morgan Stanley this week.

Geopolitical risks

Natural resources companies were among the FTSE 100 top gainers on Monday as the human tragedy in the Middle East supported commodity prices.

“As risk-off sentiment has been spreading, investors have been seeking more defensive positions amid fears of conflict escalating in the Middle East,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

“Investors are braced for volatility ahead amid fears that Hezbollah militants could attack Israel over its operations in Gaza as forces ready for invasion.”

BP and Shell added a significant number of points to the FTSE 100.

St James’s Place was the top riser, up 3%, with a small bounce back from Friday’s crash.

Ocado shares were down 5.3% at the time of writing on Monday and were the biggest faller.

“Ocado fell after a broker downgrade on the stock, citing concerns about delays to rolling out new fulfilment centres and competition for warehouse automation systems intensifying,” said Mould.