FTSE 100 holds steady above 10,800 as investors await central bank decisions

FTSE 100 holds steady above 10,800

The FTSE 100 remained broadly stable around 10,806 points on Tuesday, with investors continuing to favour consumer and defence-related stocks.

The ongoing weakness in the global semiconductor sector has had only a marginal impact on the UK market, given its relatively limited exposure to large-cap technology companies.

Energy prices and central banks stay in focus

Instead, market participants remain focused on developments in energy prices ahead of this week's policy meetings by the Federal Reserve and the Bank of England.

Investors have become increasingly cautious amid speculation that the Fed could opt for a pre-emptive interest rate hike, taking advantage of the continued resilience of the US economy and labour market as inflationary pressures have begun to reaccelerate. Such a move would provide the central bank with additional policy flexibility should inflation remain elevated in the coming months.

UK investors wait for policy clarity

Overall, trading in the UK equity market reflects a wait-and-see approach, with investors continuing to digest Monday's positive momentum while refraining from taking significant new positions ahead of the central bank meetings.

Unilever and Admiral Group outperform

On the corporate front, Unilever is among the session's standout performers after reporting strong revenue growth.

The improvement in UK consumer sentiment seen in recent months appears to be translating into healthier consumer spending, a trend reflected in the company's second-quarter results. Meanwhile, shares of insurer Admiral Group climbed to a new 52-week high, with investors continuing to build positions on the back of the stock's strong upward momentum.