5th Aug 2025 17:15
(Correcting day to Tuesday, not Wednesday)
(Alliance News) - The FTSE 100 climbed on Tuesday boosted by another day of well received earnings with Smith & Nephew, Diageo and BP all in favour, although weak US data saw progress fade late in the trading session.
"Strong corporate results are helping as they show businesses can still thrive despite the turbulent backdrop," said Russ Mould at AJ Bell.
The FTSE 100 index closed up 14.43 points, 0.2%, at 9,142.73. It had earlier traded as high as 9,177.95.
The FTSE 250 ended 42.19 points higher, 0.2%, at 21,901.69, and the AIM All-Share ended up 4.59 points, 0.6%, at 763.48.
The Cboe UK 100 ended up 0.1% at 913.38, the Cboe UK 250 rose 0.2% to 19,267.71, and the Cboe Small Companies closed down 0.1% at 17,322.85.
Well received earnings provided a lift in London with index heavyweights BP and Diageo to the fore.
Oil major BP rose 2.5% after better-than-expected second quarter results.
The strong earnings, coming on the back of a major hydrocarbon discovery in Brazil, will improve the investment mood music and be helpful for management credibility, analysts said.
Underlying replacement cost profit of USD2.35 billion was well ahead of company compiled consensus for USD1.82 billion but 15% below USD2.76 billion a year ago.
Alastair Syme at Citi said: "After several quarters where earnings have not lived up to expectations, BP's 2Q25 is significantly better than market forecasts."
"In the space of two days – yesterday's potentially highly material Bumerangue discovery in Brazil and today's earnings trajectory – we believe there are credible reasons for the investors to revisit the BP investment story," he added.
On Monday, BP reported new oil and gas findings at its Bumerangue offshore mining block, calling the discovery its "largest in 25 years".
Alongside results, BP said it will conduct a thorough review of its businesses, including targetting further cost cuts.
The company is two quarters into a 12-quarter plan and Chief Executive Murray Auchincloss said he was "encouraged" by the early progress, but added, "we know there's much more to do".
Diageo climbed 4.3% after full year results provided some reassurance although they failed to sway some commentators.
The London-based brewer and distiller, which owns brands ranging from Guinness stout to Johnnie Walker whiskey, on Tuesday reported a decline of more than a third in its bottom line in the financial year that ended in June, as a slight decline in net sales was compounded by impairment and restructuring costs, unfavourable currency movements, and narrowed operating margins.
Even so, Diageo said its results were in line with guidance.
Bank of America said: "While the environment remains challenging, it is clear that management is stepping up what it can control, and we believe these results will reassure."
Richard Hunter at interactive investor said there are "emerging glimmers of hope".
But James Edwards Jones at RBC Capital Markets said the results don't "advance the investment case - positive or negative - materially".
Smith & Nephew was the best blue chip performer, up 15%, as it said revenue growth accelerated in the second quarter of 2025.
The Watford, England-based medical devices maker said pretax profit jumped 43% to USD362 million in the half year that ended June 28 from USD253 million a year prior.
Revenue increased 4.7% to USD2.96 billion in the half year from USD2.83 billion a year ago, including a USD1.55 billion contribution in the second quarter, up 7.8% from USD1.44 billion last year.
Chief Executive Officer Deepak Nath called it a "strong performance".
The transformation of Smith & Nephew is starting to deliver "substantial value," Nath added.
In Europe on Monday, the CAC 40 in Paris fell 0.1%, while the DAX 40 in Frankfurt rose 0.4%.
In New York, the Dow Jones Industrial Average was down 0.3%, the S&P 500 was 0.6% lower, and the Nasdaq Composite declined 0.8%.
Palantir jumped 5.9% after it raised annual guidance after quarterly revenue hit USD1 billion for the first time while drugs firm Pfizer climbed 4.5% also raised its annual outlook after "another strong quarter".
But Wall Street fell back overall after figures showed the US service sector slowed down in July.
Wells Fargo noted the Institute for Supply Management service sector index fell to 50.1 in July from 50.8 in June, the third-lowest reading since the pandemic year of 2020, and below consensus which had expected an improvement to 51.5.
TD Economics said the softer trend in ISM services is "indicative of slowing US economic activity – a theme that we anticipate will become a more entrenched in the third quarter."
"While the Fed will have to tread carefully with ongoing signals of an uptick in price pressures ahead, growth-related concerns are likely to dominate and should get the Fed moving when it comes to easing monetary policy," it added.
The dollar was mixed after the data. The pound rose to USD1.3301 late on Tuesday afternoon in London, compared to USD1.3287 at the equities close on Monday. The euro traded at USD1.1579, higher against USD1.1568. Against the yen, the dollar was trading higher at JPY147.42 compared to JPY147.30.
The yield on the US 10-year Treasury was at 4.20%, trimmed from 4.22%. The yield on the US 30-year Treasury was 4.77%, narrowed from 4.81% from Monday.
Data showed growth in the UK's key service sector slowed but beat expectations in July, amid an "unfavourable global economic backdrop" while optimism improved as US tariff concerns faded.
The S&P Global UK services purchasing managers' business activity index fell to 51.8 points in July from 52.8 in June, but beat the July 24 flash reading of a sharper fall to 51.2 in July.
The composite PMI meanwhile eased to 51.5 in July from 52.0 in June, outperforming the 51.0 flash reading.
On the FTSE 250, Northampton-based building materials provider Travis Perkins climbed 5.1% as it reported improving revenue trends at its Merchanting business, while well received results, including strong orders, supported industrial flow control equipment manufacturer, Rotork, up 6.0%.
Close Brothers rose a further 6.4% after the favourable motor finance ruling but Domino's Pizza was off the menu, down 16%, after it lowered its annual outlook with "weak" consumer confidence keeping a lid on sakes growth.
Brent oil was quoted lower at USD68.04 a barrel in London on Tuesday, down from USD69.20 late Monday.
Gold firmed to USD3,385.82 an ounce against USD3,372.82.
The biggest risers on the FTSE 100 were Smith & Nephew, up 177.00 pence at 1,331.00p, Fresnillo, up 86.00p at 1,520.00p, Diageo, up 89.00p at 1,904.00p, Melrose Industries, up 26.80p at 575.00p, and BP, up 11.40p at 417.45p.
The biggest fallers on the FTSE 100 were Relx, down 90.00p at 3,814.00p, Lloyds Banking Group, down 1.80p at 80.76p,
3i, down 84.00p at 4,029.00p, Games Workshop, down 300.00p at 16,040.00p.and Experian, down 70.00p at 3,859.00p.
Wednesday's local corporate calendar has half year results from miner Glencore, insurance broker Hiscox and insurer Legal & General.
The global economic calendar on Wednesday has eurozone retail sales and construction PMI readings in the UK and across Europe.
By Jeremy Cutler, Alliance News reporter
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