Global stocks may be falling off the back of renewed tensions between the US and Iran, but the FTSE 100 is an exception thanks to its chunky energy sector exposure.
Index heavyweights BP and Shell are beneficiaries of a concerted move higher in oil prices. This upwards shift in crude reflects concern about the fate of the fragile truce between Washington and Tehran after renewed strikes over the weekend.
Add in housebuilders mounting a recovery from the lows reached after last week’s big profit warning from Vistry, and the UK’s flagship index looks decidedly healthy when compared with the sickly performance elsewhere.
Miners, airlines and tech investment vehicles including Polar Capital Global Technology and Scottish Mortgage were among the main losers in London.
After a blockbuster debut in the US last Friday, SK Hynix came back down to earth with a jolt as investors took profits in its Asia-traded shares. While that suggests certain investors believe the memory chip rally might have peaked, there are other signs to suggest the AI trade is still strong. TSMC’s second-quarter revenue beat expectations as it surged 36% to a new record high, though investors were largely keeping their powder dry as they await full quarterly figures on 16 July.
EasyJet
Castlelake is in a holding pattern while it weighs up whether to fight Apollo in the takeover battle for EasyJet.
The private credit group says it is considering its options but otherwise remains tight-lipped over its next move.
Having already made multiple bids before Apollo came along, it seems unlikely that Castlelake would just walk away.
If it chooses to raise its bid again, Castlelake must decide whether to table its best and final deal or only offer a fraction above Apollo in the hope that is enough to scare the rival off.
PageGroup
There are small glimmers of hope that PageGroup is past the worst. It’s been an awful time to be a recruitment consultant in recent years as labour markets soften around the world. Businesses have delayed investment decisions, and the rise of AI has led to workforce cutbacks.
PageGroup said about half of its operations saw growth in the second quarter, although Europe remains a weak spot. Investors have taken a glass half full mindset, bidding up the stock in hope that PageGroup can finally reverse two years of share price misery.
Last month, PageGroup’s shares hit a 23-year low as market pessimism engulfed the stock. The second quarter commentary has clearly helped to improve sentiment, but certain investors might need more convincing than just one solid trading update.
Dan Coatsworth: Head of Markets
Dan Coatsworth is AJ Bell's Head of Markets. Dan has been with the company since December 2012 and has more than 18 years' experience in the industry, following the markets and all things investing. He...
