FTSE 100 rises through Asia’s chip crash, but is London’s rally built to last?

UK stocks edged higher on Thursday as upbeat company updates helped London resist a sharp technology-led retreat across Asia.

The FTSE 100 gained about 0.2%, trading near 10,910, while the FTSE 250 also advanced.

Admiral and Persimmon led the blue-chip risers, with WPP delivering the standout move among mid-sized companies.

The gains contrasted with a 4.6% drop in South Korea’s KOSPI and declines in Japan and Hong Kong as investors reduced exposure to crowded AI trades.

Earnings resilience shields London from the technology rout

London’s outperformance reflected the FTSE’s relatively low exposure to the semiconductor companies driving the latest global pullback.

Instead, Thursday’s session was shaped by insurers, housebuilders and pharmaceuticals, where investors focused on cash returns and earnings visibility.

Admiral rose more than 4% after reporting continued first-half growth and announcing a £45 million share buyback.

The insurer said shareholder distributions for the period totalled £258.8 million, giving investors another reason to favour a company supported by resilient motor-insurance profitability.

Persimmon gained more than 3% after lifting expected 2026 home completions to about 12,500, the top of its previous range.

First-half completions rose 13% to 5,189, while revenue increased 15% to £1.73 billion and pre-tax profit climbed by the same percentage to £168 million.

Investec analysts described the housing market as challenging but viewed Persimmon as executing relatively well despite affordability pressure and rising construction costs.

WPP rally signals relief rather than a completed recovery

WPP surged by more than 20%, putting the advertising group on course for its biggest one-day advance since 1992.

The rally followed evidence that the deterioration in its business had slowed more sharply than investors expected.

First-half revenue less pass-through costs fell 4.7% on a like-for-like basis to £4.75 billion.

More importantly, the second-quarter decline narrowed to 2.8% from 6.7% in the opening three months, comfortably better than forecasts for another drop of more than 6%.

The figures offered an early endorsement of chief executive Cindy Rose’s plan to simplify WPP, cut costs and expand its use of artificial intelligence.

Client retention has improved, while recent account wins have strengthened the company’s ambition to return to organic growth next year.

Citi analysts see scope for current revenue forecasts to prove too cautious, while progress on asset disposals could reveal value not reflected in the share price.

Still, one better quarter does not erase years of client losses and concern that AI could reshape advertising economics.

Construction data offer support but risks remain

The wider UK backdrop also became slightly less hostile. The S&P Global construction purchasing managers’ index rose to 44.7 in July from 34.4 in June.

The reading remained below 50, signalling contraction, but the improvement showed the sector moving away from the severe disruption seen earlier in the summer.

Builder confidence reached its highest level since before the Iran conflict, helped by expectations for new tenders and infrastructure work.

That supported a broader rise in housebuilding shares, although weak orders and higher material costs remain constraints.

Hikma Pharmaceuticals jumped about 9% after first-half core operating profit rose 9% to $405 million and the company maintained its annual guidance.

Tritax Big Box was the FTSE 100’s weakest performer, falling more than 4%.

Oil held near $80 a barrel as investors assessed Iran-Oman negotiations over the Strait of Hormuz and threats to Saudi shipping.

Friday’s US payrolls report is the next major test, but Thursday’s session showed that company results can still outweigh a weak international lead.