London's benchmark FTSE 100 index remained largely flat on Wednesday, January 21, 2026, as robust corporate earnings from several heavyweight constituents helped offset investor concerns over escalating global trade frictions sparked by U.S. tariff threats.
The FTSE 100 closed virtually unchanged at 8,412.34 points, a marginal gain of 0.02%, after swinging between small gains and losses throughout the session. The more domestically focused FTSE 250 edged slightly higher by 0.3% to 21,056.12.
Market sentiment was buoyed by a string of positive updates from major companies. Rio Tinto surged more than 5% after reporting stronger-than-expected full-year production figures and reaffirming its dividend policy despite softer commodity prices. British American Tobacco climbed around 3% following an upbeat trading statement that highlighted resilient demand for its new-category products and reaffirmed guidance for the year ahead.
Other notable movers included HSBC, which rose modestly after posting solid quarterly results driven by its Asian operations, and consumer goods giant Unilever, which gained on news of cost-saving initiatives and improved margins.
Analysts noted that the resilience in earnings provided a buffer against broader macroeconomic worries. U.S. President Donald Trump's renewed threats to impose sweeping tariffs on several European countries including the UK unless a deal is reached on Greenland's status have rattled transatlantic relations and raised fears of retaliatory measures that could hit global trade flows.
“Strong earnings from the mining and tobacco sectors are acting as a counterweight to the geopolitical noise,” said Russ Mould, investment director at AJ Bell. “The market is trying to look through the tariff headlines for now, but any escalation could quickly change the tone.”
Sterling traded marginally lower against the dollar at around $1.2950, reflecting cautious sentiment, while the euro held steady near $1.0850.
In the banking sector, Barclays and Lloyds Banking Group posted modest gains after reporting improved net interest margins and lower impairment charges, benefiting from higher interest rates persisting longer than previously anticipated.
On the downside, some technology and luxury names faced pressure amid concerns that trade disruptions could dampen global consumer spending. Burberry slipped after a broker downgrade citing near-term challenges in China.
Overall trading volume remained subdued as investors awaited further clarity on U.S.-Europe trade negotiations and key economic data releases later in the week, including UK inflation figures and U.S. consumer confidence readings.
The performance underscores the FTSE 100's heavy reliance on multinational earners that derive significant revenue outside the UK, allowing the index to weather domestic and regional headwinds better than some European peers.
As trade tensions continue to dominate headlines, market participants are closely monitoring developments from Davos, where global leaders are convening amid heightened uncertainty over transatlantic economic ties.
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