Upbeat earnings fail to turn investors’ eyes from steep US technical recession
A string of upbeat earnings was not today enough to cushion City investor jitters over a slowdown in the US economy.
London’s premier FTSE 100 index dipped 0.04 per cent to 7,345.09 points, while the domestically-focused mid-cap FTSE 250 index, which is more aligned with the health of the UK economy, added 1.1 per cent to reach 19,855.19 points.
Several of the UK’s largest companies reported second quarter results today that signalled the global economic slowdown is having a modest impact on businesses’ bottom lines.
Those updates partially dragged attention away from new figures published today that showed the US has entered a technical recession.
Michael Hewson, chief market analyst at CMC Markets UK, said: “It’s been a mixed earnings day today for European markets with some good, and some bad. The FTSE100 has underperformed, slipping lower, weighed down by health care, telecoms and banks.”
Oil mega cap Shell, which alongside BP represents an enormous share of the FTSE 100, posted record profits off the back of surging energy prices since the end of Covid-19 restrictions and Russia’s invasion of Ukraine.
The Anglo-Dutch firm also kicked off its share buyback programme, sending its shares up marginally.
Industrial giants also stemmed losses on the FTSE 100, with miners Fresnillo and Antofagasta climbed 6.47 per cent and 3.38 per cent respectively.
But, high street lender Barclays’s profits were dragged by rising business costs and the weaker pound. A £1.5bn litigation charge to deal with a trading error that resulted in the bank issuing too many financial products hit the lender’s profits.
Its shares dropped nearly five per cent.