FTSE 100 Extends Gains as BP, Smith & Nephew and Diageo Lead the Charge

UK blue-chip index lifted by strong corporate results despite global uncertainty and a weakening pound

FTSE 100 Rises Again on Strong Earnings Momentum

The FTSE 100 continued its upward trajectory on Tuesday, buoyed by impressive earnings results from several heavyweight constituents. The blue-chip index climbed by 0.5% by mid-day, maintaining Monday’s positive momentum, even as the pound slipped by 0.1% to $1.32 against the US dollar.

The UK’s flagship index tracked broader gains across Europe, with Germany’s DAX up 0.9% and France’s CAC 40 rising 0.3%, as investors reacted positively to corporate updates and held firm despite persistent macroeconomic concerns.

BP Surprises with Strong Second-Quarter Profit

BP PLC exceeded expectations with its second-quarter results, reporting an underlying replacement cost profit of $2.4 billion, up from $1.4 billion in Q1. While down from $2.76 billion a year earlier, this result significantly beat the consensus forecast of $1.81 billion.

The strength came from improved performance across all business segments, showcasing the oil major’s resilience in the face of market volatility and a shift towards energy diversification.

Smith & Nephew Shares Surge on Profit Beat

Medical technology firm Smith & Nephew PLC saw its shares jump 15%, the biggest mover on the day, after it reported an 11.2% rise in first-half trading profit to $523 million, surpassing expectations of $496 million.

Revenue climbed to $2.96 billion from $2.82 billion, supported by a recovery in US markets and cost-cutting measures. Its trading margin also improved to 17.7%, reinforcing the company’s operational progress.

Diageo Delivers Steady Organic Growth

Diageo PLC also impressed investors, with shares rising nearly 3% after reporting 1.7% organic sales growth for the year ending June—beating expectations of 1.4%.

Although reported net sales dipped marginally to $20.25 billion, earnings per share came in stronger than forecast at 164.2 cents, reflecting healthy consumer demand across global markets.

Other Notable Market Movers

• Fresnillo PLC gained over 9% after reporting a near fourfold increase in first-half net profit, thanks to a 30% rise in revenue fuelled by stronger gold and silver prices.
• Rotork PLC shares rose 3% on better-than-expected profits, with EBITA hitting £80.8 million and a margin increase of 140 basis points.
• Serica Energy jumped 7% despite a net loss, reaffirming plans to boost output beyond 50,000 barrels per day.
• Domino’s Pizza Group tumbled over 14% after cutting full-year earnings guidance and reporting flat order volumes.
• Synthomer PLC fell 16% following disappointing results and weak sales linked to market volatility.

Market Outlook and Conclusion

The FTSE 100’s performance underscores investor optimism in the face of a mixed economic backdrop. Strong corporate results from major companies like BP, Smith & Nephew, and Diageo have reassured markets, even as high interest rates and global uncertainty continue to weigh on sentiment.

While sectors such as construction and consumer retail remain under pressure—as shown by Travis Perkins and Domino’s—others like healthcare, energy, and mining appear well-positioned for growth.

As earnings season continues, the FTSE 100 could see further momentum if more firms deliver upbeat outlooks. Investors will also be closely watching central bank signals, commodity prices, and currency movements, all of which will play a critical role in shaping short-term market direction.

Overall, the strong start to August bodes well for UK equities, suggesting that select opportunities remain for savvy investors across sectors showing resilience and growth potential.

Sources: (Investing.com, Reuters.com)