UK stocks tumbled as a global chip rout and mixed earnings from Barclays, GSK and Unilever drove the FTSE 100 to a two-week low. The pound steadied, oil firmed on Hormuz tensions, and gilts were little changed.
FTSE 100 dropped 1.2% as a global semiconductor selloff hit tech-exposed stocks, compounded by mixed earnings from Barclays, GSK and Unilever. The index tracked declines in Asian and European markets.
The index fell on the back of a global semiconductor selloff driven by demand fears, with UK-listed tech stocks and exporters adding to losses. Disappointing earnings from Barclays, GSK and Unilever removed any support, causing a broad intraday decline.
Technology and mining sectors led the declines, as chip-related stocks tumbled and commodity prices wobbled on global growth concerns.
The selloff appears driven by immediate earnings and demand fears, but if economic data worsens or trade tensions escalate, it could extend into a short-term trend.
Barclays shares fell 2% after the bank reported lower investment banking revenue, though retail banking showed resilience. The earnings missed estimates, adding to the sector's negative tone.
Barclays dropped because its Q2 earnings revealed weaker-than-expected investment banking fees, overshadowing stable consumer banking. The market reacted negatively to the miss.
Analysts remain cautious given ongoing revenue headwinds, but the bank's strong capital position could provide support. A break below recent lows might signal further downside.
Unilever shares rose 1.5% after the consumer goods giant beat profit forecasts, driven by strong emerging market sales and price increases. The earnings provided a bright spot in an otherwise downbeat session.
Unilever's beat was fueled by double-digit growth in emerging markets and successful price hikes that offset volume declines. The market rewarded the profit beat.
If commodity prices remain stable, Unilever's pricing power should support margins. However, a slowdown in key markets like India or Brazil could pose risks.
Oil prices ticked higher on escalating tensions in the Strait of Hormuz, with Iran's rhetoric adding a risk premium. The FTSE 100's energy stocks got a slight boost, but overall market sentiment remained negative.
The Strait of Hormuz is a critical chokepoint for global oil transit. Rising tensions raise the risk of supply disruption, pushing crude prices higher in the short term.
Brent crude, which is more sensitive to Middle East risks, typically sees the most impact. UKOIL, the benchmark for European crude, reflects this premium.
GSK shares edged lower 0.5% after the pharmaceutical company posted in-line earnings but provided a cautious outlook on drug pipeline delays. The lack of positive catalysts kept the stock under pressure.
GSK reported earnings that met estimates, but the company flagged delays in its drug pipeline, which tempered investor enthusiasm. The shares reacted with a modest decline.
Upcoming FDA decision dates for key drugs could swing the stock. Positive approvals would likely lift the share price significantly.
The pound held near $1.2650 as UK-focused earnings and global risk-off left the currency little changed. No major data releases shifted BOE rate expectations.
The pound remained steady as earnings from Barclays, GSK and Unilever did not alter the BOE policy outlook. With no major data surprises, GBP/USD traded sideways.
Resistance at $1.2750 and support at $1.2550 are the near-term boundaries. A break above $1.2750 would signal bullish momentum.
FTSE 100 dropped 1.2% as a global semiconductor selloff rattled equities, with Barclays, GSK and Unilever earnings failing to lift sentiment. Barclays fell on weak investment banking revenue, GSK slipped on pipeline concerns, while Unilever bucked the trend on strong profit beat. The pound and gilts were steady as BOE outlook unchanged; oil ticked up on Hormuz tensions.
The selloff was triggered by global demand concerns after a major chipmaker warned of slowing orders, hitting semiconductor stocks worldwide. The FTSE 100, with its exposure to tech and commodity sectors, fell in tandem.
Barclays reported mixed results, while GSK and Unilever posted earnings that failed to excite investors, adding to the negative tone. The earnings season overall provided little catalyst to offset broader risk-off sentiment.