The FTSE 100 closed sharply higher on Tuesday, driven by strong corporate earnings and a significant fall in the oil price that helped offset broader technology sector anxiety.
The blue-chip index closed up 89.27 points, or 0.8%, at 10,871.02, while the FTSE 250 gained 106.68 points, or 0.5%, to finish at 24,004.78.
European markets also ended the session in positive territory, with Paris’s CAC 40 closing up 0.6% and Frankfurt’s DAX 40 finishing 0.4% higher.
Wall Street trading was mixed, with the Dow Jones Industrial Average rising 1.1%, the S&P 500 edging up 0.3%, and the Nasdaq Composite slipping 0.1%.
The most dramatic market moves came from Asia, where South Korea’s Kospi plummeted 11%, with semiconductor giants Samsung Electronics and SK Hynix falling 13% and 15% respectively.
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.
European chipmaker ASML fell a further 4.6% after reports that an unnamed state-backed Chinese manufacturer has begun producing domestically developed immersion deep ultraviolet lithography machines, a segment ASML has long dominated.
In London, Unilever (ULVR) surged 8.0% after raising its full-year guidance following second-quarter underlying sales growth of 5.8%, well ahead of the consensus forecast of 4.3% and the fastest rate in more than a decade.
Barclays Capital described it as a “blow out” quarter, while RBC Capital Markets analyst James Edwardes Jones called it a “very good quarter” for the consumer goods giant behind brands including Hellman’s, Knorr and Colman’s.
GSK (GSK) advanced 3.5% after its second-quarter core operating profit reached £2.80 billion, up from £2.63 billion a year earlier, with core earnings per share rising to 50.5 pence from 46.5 pence.
GSK also announced plans for a new flagship research and development centre in Cambridge, while confirming the closure of its existing site in Stevenage as part of a broader strategic restructure.
The pharmaceuticals firm launched a three-year cost savings programme targeting £1.9 billion in annual savings by 2029, with associated costs of £2.4 billion, aimed at funding late-stage drug development investment.
Croda (CRDA) rose 8.0% after reiterating its full-year sales guidance alongside an acceleration in second-quarter sales growth, while Admiral (ADM) firmed 4.9% following an upgrade to ‘buy’ from Citigroup.
Barclays (BARC) was the standout faller among blue-chips, dropping 4.8% after what analysts at Jefferies described as a “slightly messy set of numbers”, with an investment banking income beat partly offset by misses elsewhere.
Citigroup analyst Andrew Coombs warned the results are “likely to be met with some disappointment”, citing divisional mix and additional planned investment spend, with costs coming in £450 million higher than expected.
Jefferies nonetheless struck a more measured tone, saying “none of this should significantly detract from the longer-term story, in our view,” with Barclays “committed to and confident in delivering” its 2026 and 2028 targets.
Banking peers Lloyds Banking Group (LLOY) and NatWest (NWG), which report results later in the week, fell 1.4% and 2.4% respectively in sympathy with Barclays.
On the FTSE 250, Coats Group jumped 9.0% on well-received results, while SSP Group gained 6.2% following a positive trading statement, though Ceres Power dropped 14% and Raspberry Pi fell 5.8% amid technology sector pressure.
Currency markets were subdued ahead of the Federal Reserve’s next interest rate decision, with the CME FedWatch tool placing a 70% probability on rates remaining on hold.
Bank of America strategists Alex Cohen and Mark Cabana said “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”, adding that higher oil prices had elevated the risk of a July hike.
Brent crude for September delivery fell sharply to $84.87 a barrel from $89.71 the previous session, while gold dipped to $4,035.95 an ounce from $4,077.10 on Monday.