Bankers Investment Trust PLC

Global equity markets were broadly flat in July as investors navigated a more volatile backdrop. Concerns emerged around the scale of investment being directed towards artificial intelligence (AI) infrastructure, prompting a reassessment of share prices across parts of the technology sector. At the same time, escalating tensions in the Middle East between the US and Iran pushed oil prices sharply higher, reviving concerns around inflation and the outlook for interest rates. Investor sentiment improved later in the month, however, as a number of companies delivered encouraging earnings results, which provided reassurance about the strength of underlying corporate fundamentals.

While geopolitical developments and central bank monetary policy remained important considerations for investors, attention increasingly shifted towards company earnings and the sustainability of future growth expectations. Financial markets had entered the period with elevated expectations for many of the market's strongest performers, particularly companies in the technology sector. This appeared to result in greater sensitivity to both positive and negative news. This also led to increased differentiation between companies as investors placed greater emphasis on the quality of earnings, cash generation and management execution.

At the sector level, energy stocks were among the strongest performers, supported by higher oil prices and robust corporate results. Financials stocks also delivered solid returns following resilient earnings from several large banking institutions. By contrast, information technology (IT) was among the weaker areas of the market for much of the month as questions were raised about AI-related spending and share price levels. Nevertheless, strong results from several leading technology businesses towards the end of the month helped restore confidence and supported a recovery in share prices across parts of the sector.

Overall, July highlighted the market's growing focus on company fundamentals, with corporate results playing a more important role in driving share prices than broader macroeconomic developments.