Daily market update: Shell, Samsung, Capita and Young's

Energy and consumer non-cyclical stocks lifted the FTSE 100 as investors looked for opportunities away from the tech space.

Although Samsung’s results were stellar, investors are getting nervous about the scale of money ploughing into AI and whether it’s a bubble waiting to burst.

This is where the UK stock market has an advantage. In an environment where tech is going out of favour, the FTSE 100 could shine as it has everything else on the menu. There are plenty of jam today companies on the UK stock market offering decent profits and much less of the jam tomorrow-type companies omnipresent in the US.

ITV fell nearly 5% as the market digested analysis of the proposed sale of assets to Sky and JPMorgan cut its rating on the stock from ‘overweight’ to ‘neutral’. It seems likely that the competition authorities will conduct a probe of Sky’s enlarged position in the advertising market which could delay proceedings.

Investors raised a glass to Young’s which has benefited from the World Cup boost. The tournament has encouraged people in their droves to visit the pub, and watch matches in the company of fellow football fans. Good weather has also been a sales driver as Young’s benefits from having pubs with gardens and riverside locations.

FirstGroup was powered up after winning a contract to transport individuals working on the Sizewell C nuclear plant to and from site in Suffolk. It might not sound very exciting, but the deal could run for up to five years and provides FirstGroup with all-important earnings visibility.

Shell

There was a sense of relief at Shell after it said second quarter integrated gas production would be better than previously expected. The news was part of a Q2 teaser, helping to guide the market before the full numbers are released.

The update coincided with a pick-up in oil prices, with Brent crude rising 1.4% to $73 in a sign that the market isn’t entirely convinced the US-Iran peace deal is set in stone.

Shipping activity is picking up through the Strait of Hormuz, but safe passage is not guaranteed.

Samsung Electronics

The scale of earnings growth at Samsung is jaw-dropping and a sign of the AI times. Second quarter operating profit jumped 19-fold as it rode the surge in demand for chips.

It’s the kind of performance most companies can only dream of. Unfortunately for Samsung, it just wasn’t enough for investors. They had an inkling the results would be good given everything that’s happened with memory chip prices this year, with significant demand growth in a supply-constrained market making these components incredibly valuable.

Investors might have taken the view all the good news is now in the price, and that it was time to take some money off the table.

Samsung’s shares slumped, dragging stock market darling SK Hynix down with it. Investors are increasingly showing nervousness at the pace of spending with AI and are viewing the tech space with more caution.

Capita

Capita’s shares dropped 15% after it admitted to falling short on service standards for administering a civil service pension scheme contract.

The outsourcing group apologised and said processes were now in place to work through a backlog of cases.

Capita has been involved in numerous contract scandals over the years, severely damaging its reputation. The latest incident only makes matters worse.