UK’s FTSE 100 kicks off week on cautious note; WPP shines on AI deal

UK’s FTSE 100 edged lower on Tuesday after a long weekend, with investors avoiding big bets on fresh worries over the U.S. debt deal, while advertising firm WPP logged its best day in over three weeks on its partnership with chipmaker Nvidia.

World’s largest advertising group WPP Plc (LON:WPP) rose 2.0% after announcing its partnership with U.S.-based chipmaker Nvidia Corp to build generative AI-enabled content for digital advertising.

“This engine would enable WPP creative teams to efficiently produce commercial content at scale,” Silvia Cuneo, director at Deutsche Bank (ETR:DBKGn) wrote in a note.

“We think this collaboration strengthens WPP’s position in new technologies and generative AI, and should be reassuring for the sentiment on the stock.”

The broader media sector housing WPP climbed 0.4%.

Meanwhile, the internationally-focused FTSE 100 was down 0.1%, after a few U.S. Republican lawmakers said they would oppose the deal to raise the United States’ debt ceiling.

The mid-cap FTSE 250 ticked 0.4% higher, boosted by a 17.1% surge in Hunting (LON:HTG) Plc after the oil services provider lifted its annual core earnings outlook.

Defensive sectors such as healthcare stocks and utilities were also among the top gainers.

UK equities have recently come under pressure on worries over more rate hikes after data showed domestic inflation was not easing as expected. Analysts are concerned that the economy could enter a period of stagflation which would not bode well for company earnings.

Among other movers, Purplebricks Group Plc added 1.8% after the online estate agent said it had received an indicative takeover proposal from top shareholder Lecram Holdings for 1.5 million pounds ($1.93 million) in cash.

Unilever (LON:ULVR) Plc dropped 1.2% after it said Chief Financial Officer Graeme Pitkethly would retire from the consumer goods giant by the end of May 2024.

Bunzl (LON:BNZL) Plc was off 0.7% after the business supplies distributor said it would acquire a safety business in Brazil and Spain.

UK’s FTSE 100 kicks off week on cautious note; WPP shines on AI deal