London’s equity markets showed resilience on Tuesday, mirroring positive momentum across Europe as investors reacted to signals of a potential gradual approach to U.S. tariff hikes under President-elect Donald Trump. While the FTSE 100 edged up modestly, downbeat earnings reports weighed on its performance, leaving it trailing behind the broader optimism seen in the FTSE 250 and other European indices.
London-listed shares presented a mixed yet promising landscape. The FTSE 100 gained 0.2% by mid-morning, with the domestically focused FTSE 250 climbing a stronger 0.7%. Homebuilders delivered standout results, with Persimmon surging nearly 6% after forecasting 2024 earnings towards the higher end of expectations, driven by robust sales and pricing. Industrial metal miners capitalised on rising copper and iron ore prices, adding further momentum, while aerospace and defence stocks regained ground after the prior session’s slump.
Broader European equity markets received a boost from reports suggesting a measured implementation of U.S. tariffs, which alleviated fears of abrupt economic disruption. Adding to the positive sentiment, British government bond yields eased slightly from multi-year highs, though they remained elevated.
However, certain sectors curbed the FTSE 100’s gains. BP slid nearly 3% following a profit warning tied to weaker refining margins and lower production. Retailer JD Sports tumbled over 8% after issuing a profit forecast downgrade, citing challenging trading conditions and intensified competition. Meanwhile, Ocado Group defied the trend, soaring more than 9% on accelerating sales growth in its online retail venture with Marks & Spencer.
Investors balanced these sectoral fluctuations against broader concerns about the Federal Reserve’s potential slowdown in interest rate reductions. Despite lingering caution, the day’s gains underscored a tentative optimism across UK and European markets.
Persimmon, BP, Ocado, and JD Sports exemplify the diversity of opportunities and challenges shaping London’s equity landscape as businesses navigate evolving market conditions.
Fidelity Special Values PLC (LON:FSV) aims to seek out underappreciated companies primarily listed in the UK and is an actively managed contrarian Investment Trust that thrives on volatility and uncertainty.
