- FTSE 100 off 32 points at 10,353
- Dow Jones climbs at the open
- BP leads the losers
- Croda boosted by big bank support
5.05pm: FTSE slips
As the FTSE 100 pulled back, down 32 points at 10,353 at the close, over in the US, the Dow Jones powered ahead, adding another 0.5% at just shy of 50,400 points.
“Despite US retail sales stalling and weaker-than-expected small business optimism, the Dow extends its record gains above the 50,000 mark,” IG chief technical analyst Axel Rudolph said. “European markets are mixed, the FTSE 100 weighed down by ongoing political turmoil, miners retreating and BP suspending a buyback.”
3.23pm: Modest gains on Wall Street
Wall Street opened with modest gains on Tuesday, with the Dow Jones climbing 0.7% to 50,473, the S&P 500 up 0.3% at 6,984, and the Nasdaq inching 0.2% higher to 23,295.
Investors are pacing themselves ahead of a packed week of economic data, with Wednesday’s monthly jobs report taking center stage.
Retail sales in December came in flat versus expectations of a 0.4% rise, signaling a cooling consumer environment.
Adding to the picture of a moderating labor market, the US Employment Cost Index rose 0.7% in Q4, slightly below the 0.8% forecast.
“Compensation costs were up 3.4% year-over-year, the slowest pace since early 2021. Overall, compensation growth has settled to a pace that supports real income gains for workers without adding meaningful pressure to inflation,” Wells Fargo analysts noted. “This dynamic should make labor costs less of an obstacle to inflation’s return to target, but it also underscores a moderating labor market that keeps the Fed alert to the downside risks to its full employment mandate.”
ADP reported that private employers added an average of 6,500 jobs per week over the four weeks ending January 24.
1.17pm: Lurch lower ahead of Wall Street open
FTSE 100 losses deepened on Tuesday, with the index down 50 points in early afternoon trade, underperforming broader markets ahead of the US open.
Wall Street equity futures pointed to a muted start despite the Dow Jones Industrial Average closing at another record high on Monday.
Contracts linked to the S&P 500 and the Nasdaq Composite were broadly flat, extending a pattern of modest gains without momentum.
Investor caution followed a modest rebound in technology shares after a recent pullback driven by concerns over valuations.
Strong demand for high-performance chips, particularly those linked to artificial intelligence, has helped steady sentiment in the tech sector.
Corporate earnings remain in focus, with results from consumer and healthcare groups broadly in line with expectations so far.
Automakers and industrial companies are next in line, with markets watching for signals on profit margins and end-user demand.
Positive updates from suppliers to artificial intelligence leaders such as Nvidia have helped ease fears of excessive enthusiasm in the sector.
Attention is now turning to a packed economic calendar, beginning with US retail sales figures and culminating in labour market and inflation data later in the week.
Recent signs of cooling in US employment data have raised hopes for a gentle economic slowdown, though any upside surprises could unsettle investors.
Gold prices remain elevated after recent volatility, with bullion still seen by many banks as a defensive asset.
Bitcoin has struggled to recover recent losses, highlighting continued nervousness in riskier parts of the market.
Markets remain poised near record levels, but the next move will depend on whether data confirms a slowing US economy without signs of stress.
12.05pm: Croda on the charge
Croda International shares surged 7.6% to 3,148p on Tuesday after JPMorgan reaffirmed its 'overweight' rating and raised its price target to 4,000p, arguing that the worst of the earnings downgrade cycle is now over and the company is poised for a multi-year recovery.
Analyst Chetan Udeshi sees adjusted EPS growing at a 13% compound annual rate between 2025 and 2028, supported by organic and inorganic investment returns, ongoing cost actions, and improving capital returns.
JPMorgan’s 2026/27 EPS forecasts are already 4–5% ahead of consensus, underlining its confidence in Croda’s rebound.
The bank said market pessimism over Croda’s fundamentals is overdone, noting the company’s post-COVID margin compression is stabilising.
While EBIT margins have dropped to 17% from pre-pandemic highs of 25%, Croda still leads the sector and is expected to target a return to mid-20% margins in its FY25 results due on 24 February.
JPMorgan also expects the unveiling of a new mid-term financial framework alongside the results to reassure investors and support a potential re-rating. On current multiples, Croda trades at a discount to its historic forward P/E of around 20x.
11.00am: BP applies brakes to the Footsie
The FTSE 100 fell almost 20 points on Tuesday, underperforming global peers despite a broadly positive backdrop for equities.
The index was dragged into the red by weakness in BP, Standard Chartered and Babcock.
Because of its index weighting, BP exerted the most pressure as it fell 4.6% after full-year profits dropped 16% to $7.5 billion.
The oil major confirmed it would pause share buybacks to prioritise balance sheet strength, with net debt still above $22 billion. While the move is seen as prudent ahead of incoming chief executive Meg O’Neill’s arrival in April, investors reacted negatively to the decision.
Standard Chartered and Babcock also weighed on sentiment, each falling around 5% after disappointing updates.
By contrast, AstraZeneca shares held steady following solid full-year numbers.
The drugmaker posted 8% revenue growth and an 11% rise in core earnings per share for 2025, driven by an 18% jump in oncology sales.
Management guided for further mid-to-high single-digit revenue growth in 2026, supported by a strong pipeline and 43 approvals secured last year.
Barclays added modestly after reporting a 13% rise in pre-tax profit and lifting its return on tangible equity target to 14% by 2028. The bank reaffirmed plans to return at least £15 billion to shareholders over the next two years.
Elsewhere, Bellway rose 4% after highlighting improving customer demand, lifting sentiment across the housebuilding sector. Barratt Developments, Redrow and Persimmon each gained around 2%.
9.30am: Barclays results reassure
Barclays shares rose 1.9% on Tuesday as investors digested its upgraded financial guidance for 2026 and a resilient set of results that beat revenue expectations.
However, scrutiny continues over the bank’s position in UK wealth management following recent competitive moves in the sector.
The bank recently reported a 13% rise in full-year pre-tax profit to £9.1 billion and earnings per share of 43.8p, up 22%. Its return on tangible equity reached 11.3%, with all divisions delivering double-digit returns.
Barclays also raised its medium-term ambitions, targeting RoTE of more than 14% by 2028 and planning capital distributions exceeding £15 billion between 2026 and 2028.
8.20am: Blue-chips sneak into the red
Defying the global trend and bucking expectations, UK blue-chips drifted lower in the first minutes of Tuesday's session.
Ahead of the open, it was expected that some of the positivity overnight in the US and Asia would rub off on London.
But with a slew of blue-chip results, it was left to traders to pick through the announcements and form a view.
The biggest depressant was BP, down 4% after suspending its buyback programme. The oiler, while shrinking by the day, still has a significant index weighting, so it was bound to stymie any early positivity.
Partially counterbalancing this was Barclays, which weighed in with a robust set of prelims that revealed a small Q4 beat and a planned £15 billion giveaway.
Pre-market: Tech stocks recover amid lingering AI spending concerns
The FTSE 100 is expected to open 20 points higher on Tuesday at 10,406 after Asian equity markets extended their advance following gains on Wall Street.
Tokyo's Nikkei index was the stand-out, jumping more than 2% to a fresh record.
The rally followed Japanese Prime Minister Sanae Takaichi's decisive lower-house election victory.
Takaichi's landslide win has raised market expectations for increased fiscal stimulus and major tax cuts.
Technology companies led the Tokyo surge, with SoftBank, the investment group, climbing more than 10%.
Hong Kong, Sydney, Seoul and Shanghai also recorded substantial advances.
Sentiment was supported by another strong Wall Street session, where Microsoft, Meta and Nvidia led gains among major technology stocks.
Concerns persist about vast sums being invested in artificial intelligence, with questions over when returns will materialise.
Investors are also awaiting key US economic data this week, including non-farm payrolls figures on Wednesday, delayed from Friday due to a brief government shutdown.
Inflation and retail sales data are also scheduled for release.