28th Jul 2026 17:09
(Alliance News) - The FTSE 100 made strong progress on Tuesday, buoyed by positive earnings and a drop in the oil price, which helped shrug off worries sparked by a chip sector sell-off in Asia.
The FTSE 100 index closed up 89.27 points, 0.8%, at 10,871.02. The FTSE 250 ended up 106.68 points, 0.5%, at 24,004.78, while the AIM All-Share closed down 3.75 points, 0.5%, at 767.94.
The Cboe UK 100 was up 0.6% at 1,080.22, the Cboe UK 250 was 0.4% higher at 20,928.14, and the Cboe Small Companies was flat at 18,593.76.
In European equities on Tuesday, the CAC 40 in Paris closed up 0.6%, while the DAX 40 in Frankfurt ended 0.4% higher.
Stocks in New York were mixed. The Dow Jones Industrial Average was up 1.1%, the S&P 500 index was 0.3% higher, and the Nasdaq Composite declined 0.1%.
In Asia, South Korea's Kospi slumped 11% with its two major constituents, semiconductor giants Samsung Electronics and SK Hynix, down 13% and 15% respectively.
The falls came as investors grew increasingly concerned over financing risks tied to AI infrastructure spending and intensifying competition from China.
David Morrison, senior market analyst at Trade Nation, said "there's an element of panic creeping in now," noting SK Hynix has lost 47% of its value since the end of June without any significant rebound.
In Europe, ASML fell a further 4.6% after The Information reported that an unnamed state-backed Chinese manufacturer has started producing domestically developed immersion deep ultraviolet lithography machines, a segment dominated by ASML.
In London, well-received earnings from Unilever, Croda and GSK spurred gains on the blue-chip FTSE 100, although a "messy" print from lender Barclays saw it lead the fallers.
Unilever rose 8.0% as it raised guidance after second-quarter results beat expectations.
Unilever, which owns brands such as Hellman's mayonnaise, Knorr stock cubes and Colman's mustard, reported underlying sales growth of 5.8% in the three months ended June, ahead of consensus of 4.3%, the fastest rate in more than a decade.
Barclays Capital called it a "blow out" quarter, while RBC Capital Markets analyst James Edwardes Jones said it was a "very good quarter".
Croda gained 8.0% as it reiterated full-year sales guidance as it reported an acceleration in sales growth in the second quarter of 2026.
Admiral firmed 4.9%, boosted by an upgrade to 'buy' by Citigroup, while GSK advanced 3.5% after its second-quarter numbers topped forecast.
London-based pharmaceuticals maker GSK reported core operating profit of GBP2.80 billion in the quarter ended June 30 compared with GBP2.63 billion the year prior. Core earnings per share increased to 50.5 pence from 46.5p.
Pretax profit totalled GBP2.68 billion, up from GBP2.50 billion.
Pretax profit and core EPS outstripped company-compiled consensus of GBP2.52 billion and 47.1p respectively.
GSK said it is planning a cost savings drive to fund investment in late-stage drug development and announced a new flagship research & development centre is to be established in Cambridge. The existing site in Stevenage will be closed.
To fund the investment in the late-stage portfolio and R&D, GSK is starting a three-year cost savings programme to simplify the organisation and to reallocate capital and resources. It aims to improve operating margin with GBP1.9 billion annual savings targeted by 2029 for costs of GBP2.4 billion.
But Barclays fell 4.8% after what analysts at Jefferies called a "slightly messy set of numbers" with an Investment Banking income beat partly offset by small misses elsewhere.
Citigroup analyst Andrew Coombs said the results are "likely to be met with some disappointment", based on the divisional mix and additional planned investment spend.
"Our concern is that the mix is likely to disappoint with the three UK businesses showing a combined 2% [pretax profit] miss," he added, noting costs were also GBP450 million higher.
However, Jefferies added that "none of this should significantly detract from the longer-term story, in our view," with the bank "committed to and confident in delivering" all 2026 and 2028 targets.
UK banking peers, Lloyds Banking Group which reports on Thursday, fell 1.4%, and NatWest, which reports on Friday, fell 2.4%.
On the FTSE 250, well received results boosted Coats Group by 9.0%, while a trading statement lifted SSP by 6.2%.
But the technology fall-out weighed on Ceres Power, down 14%, and Raspberry Pi, down 5.8%.
The dollar was mixed ahead on the eve of the next Federal Reserve decision, with the CME FedWatch tool placing a 70% chance that interest rates will remain on hold.
Bank of America expects the Federal Open Market Committee to hold with two hike dissents.
"Our base case is a hold in July but it's a much closer call than we could have imagined after the soft June inflation data," BofA's Alex Cohen and Mark Cabana said. "Higher oil has raised...risks of a July hike. Inflation expectations have moved up, which raises stakes at this meeting."
While BofA doesn't think the data will force Fed Chair Kevin Warsh into a hike "we see strategic incentives for him to do so," they said. "There is a narrow window - hiking in that period would differentiate him from Powell and allow him to claim credit for any disinflation down the line, even if it's mechanical."
The pound was basically flat at USD1.3306 on Tuesday afternoon, against USD1.3305 at the equities close on Monday. Against the euro, sterling fell to EUR1.1674 from EUR1.1698.
The euro stood higher at USD1.1397 from USD1.1376. Against the yen, the dollar was little moved at JPY163.68, compared to JPY163.67.
The yield on the US 10-year Treasury narrowed to 4.59% on Tuesday from 4.65% on Monday. The yield on the US 30-year Treasury fell to 5.09% from 5.13%.
Brent oil for September delivery traded lower at USD84.87 a barrel on Tuesday afternoon, from USD89.71 late Monday.
Gold was lower at USD4,035.95 an ounce on Tuesday from USD4,077.10 on Monday.
The biggest risers on the FTSE 100 were Croda International, up 235.00p at 3,160.00p, Unilever, up 371.00p at 4,998.00p, Experian, up 177.00p at 2,981.00p, Compass Group, up 1.83p at 32.85p and Relx, up 150.00p at 2,832.00p.
The biggest fallers on the FTSE 100 were Barclays, down 25.40p at 505.00p, Polar Capital Technology Trust, down 19.00p at 610.50p, Centrica, down 4.60p at 155.20p, Lion Finance, down 330.00p at 11,440.00p and Diploma, down 210.00p at 7,420.00p.
Wednesday's economic calendar has Australian CPI overnight, UK mortgage approvals and the US interest rate decision.
Wednesday's UK corporate calendar has half-year results from miners Glencore and Rio Tinto, Asia-focused bank Standard Chartered, consumer goods firm Reckitt Benckiser and engineer Weir Group.
By Jeremy Cutler, Alliance News reporter
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