London close: Stocks manage small gains on GDP growth
London equities ended higher on Thursday, though gains remained modest as upbeat UK economic data was offset by weaker oil prices.
The FTSE 100 index rose 0.57% to close at 8,633.75 points, while the FTSE 250 advanced 0.12% to 20,844.76.
In currency markets, sterling was last up 0.13% on the dollar to trade at $1.3280, as it gained 0.09% against the euro, changing hands at €1.1880.
“A weak start for the FTSE 100 has given way to another push above 8,600 as the close looms, with the index shrugging off the impact of a number of key names going ex-dividend,” said IG chief market analyst Chris Beauchamp.
“BP’s fall has been exacerbated by the drop in oil prices, which seem set for a new leg lower on hopes that a lasting period of détente between Iran and the US is in store, and rumoured suitor Shell has come under pressure too. Iran’s return to the fold of oil production is likely to see yet more supply to come online, complicating OPEC’s task even further.”
Beauchamp noted that, while investors remained alert for any sign of weakness in US data, US retail sales and Walmart earnings were yet to show indicators of a slowdown.
“Factory-gate inflation was in negative territory, piling on the pressure on the Fed to move, though it is worth noting that since PPI excludes imports, the actual impact of tariffs has yet to show up.
“Overall sentiment was supported by news that EU and US representatives will begin discussions, raising hopes of a truce on yet another front of Donald Trump’s wide-ranging trade war.”
UK economy grows more than expected in first quarter
In macro news, the UK economy grew more strongly than expected in the first quarter of 2025, with GDP expanding by 0.7%, according to the Office for National Statistics.
The figure marked a notable acceleration from 0.1% growth in the final quarter of 2024 and surpassed economists’ expectations of 0.6%.
The services sector led the advance with a 0.7% increase, while production rose 1.1%.
Construction output was flat over the quarter.
“The economy grew strongly in the first quarter of the year, largely driven by services, though production also grew significantly, after a period of decline,” said ONS director of economic statistics Liz McKeown.
“Growth in services was broad based, with wholesale, retail and computer programming all having a strong quarter as did car leasing and advertising.
“These were only slightly offset by falls in education, telecoms and legal services.”
On the continent, eurozone industrial production surged in March, rising 2.6% month-on-month, according to Eurostat, outperforming forecasts of 1.8% and driven by strong demand for capital and consumer goods.
Germany posted a 3.1% rebound in output, reversing a prior decline, while Spain, France and Italy all registered more modest gains.
The improvement contributed to a 0.3% GDP expansion in both the Eurozone and EU for the first quarter, up from 0.2% in the previous quarter.
Employment also rose, increasing by 0.3% in the Eurozone and 0.2% across the EU.
Bert Colijn, chief Netherlands economist at ING, said much of the uplift in industrial production could be accounted for by US companies front-loading eurozone products ahead of Donald Trump’s tariff regime being announced on 2 April.
“So, eurozone manufacturing seems to have experienced a Cinderella moment in the first quarter,” he said.
“But when the clock struck Liberation Day, it is likely that eurozone ball gowns turned back to rags.”
Across the Atlantic, US Federal Reserve chair Jerome Powell signalled that interest rates could remain elevated over the longer term, citing a shift in the global economic environment marked by more frequent and persistent supply shocks.
Powell said the Fed was reassessing its policy framework in light of lessons learned since the pandemic, warning that inflation volatility may remain elevated compared to the stable period that characterised much of the 2010s.
Hikma surges on new financial targets, Auction Technology in the red
On London’s equity markets, Hikma Pharmaceuticals jumped 7.37% after unveiling new medium-term financial targets.
The company forecast a 6% to 8% compound annual revenue growth rate between 2024 and 2027 and a 7% to 9% rise in operating profit, while also setting a goal to reach $5bn in annual revenue by 2030.
Watches of Switzerland climbed 5.18% after posting strong full-year sales in both the UK and US, while Serco gained 3.77% following the award of three Royal Navy contracts worth over £1bn.
National Grid rose 3% after delivering full-year earnings ahead of expectations, and Aviva advanced 2.65% as it reported strong premium growth and reaffirmed its group targets.
JD Sports added 1.38% amid speculation that US rival Dick’s Sporting Goods is close to acquiring Foot Locker in a $2.3bn deal.
On the downside, Auction Technology Group tumbled 11.24% after cautioning that macroeconomic uncertainty had dampened activity in March, despite maintaining its full-year guidance.
Spectris and PageGroup dropped 5.58% and 5.08%, respectively, as they traded ex-dividend.
Sage Group and 3i Group each declined 4.22%, with Sage slipping despite a £200m extension to its buyback programme and 3i falling short of earnings expectations.
BP and Shell were also under pressure, down 3.9% and 1.95%, respectively, as lower oil prices weighed on the energy sector.
Reporting by Josh White for Sharecast.com.
Market Movers
FTSE 100 (UKX) 8,633.75 0.57%
FTSE 250 (MCX) 20,844.76 0.12%
techMARK (TASX) 4,698.21 0.44%
FTSE 100 - Risers
Hikma Pharmaceuticals (HIK) 2,084.00p 7.37%
Compass Group (CPG) 2,637.00p 3.82%
Fresnillo (FRES) 1,020.00p 3.52%
BAE Systems (BA.) 1,755.00p 3.17%
National Grid (NG.) 1,046.00p 3.00%
Smurfit Westrock (DI) (SWR) 3,521.00p 2.65%
Vodafone Group (VOD) 70.10p 2.58%
United Utilities Group (UU.) 1,097.00p 2.48%
Rolls-Royce Holdings (RR.) 816.00p 2.38%
Aviva (AV.) 584.80p 2.38%
FTSE 100 - Fallers
3i Group (III) 4,020.00p -4.22%
The Sage Group (SGE) 1,230.50p -3.83%
BP (BP.) 368.25p -3.35%
Anglo American (AAL) 2,137.00p -2.61%
St James's Place (STJ) 1,071.00p -2.33%
Admiral Group (ADM) 3,266.00p -2.10%
InterContinental Hotels Group (IHG) 9,080.00p -1.84%
Entain (ENT) 777.20p -1.75%
Shell (SHEL) 2,473.00p -1.65%
Spirax Group (SPX) 6,100.00p -1.45%
FTSE 250 - Risers
Watches of Switzerland Group (WOSG) 414.40p 5.18%
AO World (AO.) 98.80p 4.32%
Chemring Group (CHG) 424.50p 3.28%
Investec (INVP) 503.50p 3.26%
Just Group (JUST) 147.00p 3.23%
Serco Group (SRP) 180.40p 3.09%
Hammerson (HMSO) 268.80p 3.05%
Grainger (GRI) 219.50p 2.81%
HICL Infrastructure (HICL) 113.40p 2.72%
Great Portland Estates (GPE) 335.00p 2.60%
FTSE 250 - Fallers
Auction Technology Group (ATG) 485.50p -11.24%
Lion Finance Group (BGEO) 6,205.00p -8.59%
Pagegroup (PAGE) 272.80p -5.08%
Spectris (SXS) 2,078.00p -4.94%
Aston Martin Lagonda Global Holdings (AML) 79.60p -4.50%
Wizz Air Holdings (WIZZ) 1,646.00p -4.41%
THG (THG) 27.24p -4.02%
Diversified Energy Company (DEC) 1,025.00p -3.86%
TBC Bank Group (TBCG) 4,470.00p -3.67%
Bytes Technology Group (BYIT) 507.50p -2.59%