London close: Stocks positive despite tariff uncertainty

dl city of london square mile financial district generic 09 — Sharecast / Andras Stefuca via Pexels

London stocks ended higher on Friday, buoyed by broad-based gains despite lingering uncertainty over global trade tariffs.

The FTSE 100 index rose 0.64% to close at 8,772.38 points, while the FTSE 250 edged up 0.14% to 21,028.01 points.

On the currency front, sterling was last down 0.27% on the dollar to trade at $1.3456, as it slipped 0.085% against the euro, changing hands at €1.1861.

“Whereas Asian and US stock indices dipped on the last day of the month while most European markets regained some of Thursday's trade uncertainty-induced losses, the month of May showed gains across the board,” said IG chief technical analyst Axel Rudolph.

“Slowing US consumer spending, stable PCE and German inflation data didn't move the dial much as investors look forward to next week's US employment and purchasing managers data which is hoped to provide some clues as to the impact of tariffs on the American economy.”

Rudolph noted that oil prices had fallen by around one percent, heading for a second weekly loss amid rising US-China trade tensions ahead of Saturday's OPEC+ meeting.

“The group is likely to consider a further production increase of 411,000 barrels per day, continuing the phased unwinding of voluntary supply cuts that began in April.

“Following last week's positive weekly close, gold and silver prices are on track for a weekly loss as the US dollar ends the week in positive territory, regaining some of its previous week's sharp losses.”

UK business confidence bounces, US personal income growth accelerates

In economic news, business confidence in the UK rose to its highest level in nine months in May, buoyed by easing global trade tensions and recovering financial markets.

The Lloyds Business Barometer showed an 11-point increase to 50, reversing April’s sharp decline triggered by president Donald Trump’s aggressive tariff measures.

A partial rollback of those tariffs and a 90-day truce between the US and China had helped improve sentiment, with the UK also securing a trade deal with Washington.

Economic optimism climbed 16 points to 44, while firms’ expectations for their own trading prospects rose to 56.

Confidence in the construction sector reached a nine-month high, and the service sector posted its best reading in a year, though retail sentiment slipped to its lowest since January.

“The rise in confidence is driven by a sharp increase in economic optimism, reflecting the recovery in financial markets amid the easing of global trade tensions,” said Hann-Ju Ho, senior economist at Lloyds Commercial Banking.

“Equally as encouraging is the fact that trading prospects, wage expectations and hiring intentions also saw improvements.

“The positive trends in these metrics are important signals for potential growth and resilience in the business community and wider economy.”

Across the Atlantic, US personal income growth accelerated in April, rising by 0.8% on the month, exceeding expectations.

Spending growth slowed to 0.2% after a strong March, while inflationary pressures eased.

The annual rate of headline PCE inflation slowed to 2.1% from 2.3%, while core inflation fell to 2.5%.

Americans also increased their savings, with the personal savings rate rising from 4.3% to 4.9%.

The US trade deficit in goods narrowed sharply in April, falling to $87.6bn from March’s record $162.3bn.

It came as imports plunged nearly 20%, more than offsetting a 3.4% rise in exports.

The drop in imports followed a March surge as businesses sought to front-run new tariffs.

Meanwhile, US wholesale inventories were flat on the month, missing expectations, as durable goods stockpiles slipped and non-durable inventories increased modestly.

In Germany, inflation moderated slightly in May to 2.1%, down from 2.2% in April but still just above market forecasts.

However, retail sales unexpectedly declined by 1.1% in April from the previous month, disappointing expectations for modest growth.

On a year-over-year basis, retail volumes rose 2.3% in real terms.

M&G rises in Japan tie-up, insurers in focus

On London’s equity markets, investment manager M&G jumped 5.49% following news of a strategic partnership with Japan's Dai-ichi Life.

As part of the agreement, Dai-ichi will acquire a 15% stake in M&G and designate it as its preferred asset management partner in Europe.

M&G said the deal was expected to generate at least $6bn in fund inflows over the next five years.

Insurers Hiscox and Beazley also advanced, rising 0.63% and 0.91% respectively.

Hiscox gained after being upgraded to ‘outperform’ by BNP Paribas Exane, while both stocks benefited from Berenberg resuming coverage with a ‘buy’ recommendation.

Berenberg said that Beazley - its top pick across the London market - could surprise to the upside on cyber insurance.

“Pricing in cyber has been declining for the past two years, being now down 16% since the peak of summer 2022, but still over 70% higher than four years ago,” it said.

“We believe that cyber is approaching an inflection point in terms of pricing, driven by market growth, evolving risks and underwriting discipline, while the global market could double in size during the next five years.

“Beazley, as a well and long-established primary carrier in cyber, should be a net beneficiary from this development.”

Weir Group added 1.27% after receiving a broker upgrade to ‘buy’ from Kepler Cheuvreux.

Meanwhile, fintech firm Alpha Group rose 3.44% as it announced an extension to takeover talks with US-based Corpay, which had previously declined an initial approach.

Drax Group climbed 2.96% after confirming it would not raise its bid for Harmony Energy Income Trust.

The decision effectively ended Drax’s pursuit of the battery storage investor, paving the way for Foresight Group to acquire HEIT in a deal valued at £209.9m.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,772.38 0.64%
FTSE 250 (MCX) 21,028.01 0.14%
techMARK (TASX) 4,866.00 0.84%

FTSE 100 - Risers

M&G (MNG) 236.70p 5.48%
GSK (GSK) 1,507.00p 3.50%
BT Group (BT.A) 179.45p 3.16%
AstraZeneca (AZN) 10,720.00p 3.10%
Unite Group (UTG) 861.00p 2.56%
Coca-Cola Europacific Partners (DI) (CCEP) 6,810.00p 2.41%
Flutter Entertainment (DI) (FLTR) 18,745.00p 2.35%
Glencore (GLEN) 283.40p 1.98%
Whitbread (WTB) 2,904.00p 1.97%
United Utilities Group (UU.) 1,171.00p 1.87%