London close: Stocks rise as trade tensions continue

The FTSE 100 index rose 0.61% to close at 8,623.29 points, while the FTSE 250 advanced 0.53% to 20,762.88 points.

In currency markets, sterling was last up 0.3% on the dollar to trade at $1.2517, while it slipped 0.11% against the euro, changing hands at €1.2013.

“Index heavyweight GSK has helped the FTSE 100 to recover some lost ground after the tariff-volatility earlier in the week,” said IG chief market analyst Chris Beauchamp.

“Overall, a positive mood continues to re-emerge in markets, coming despite the poorer earnings from Alphabet last night.

“President Trump’s attention has moved on from tariffs and trade for the time being, though the mercurial leader could easily return to his favourite topic soon.”

Beauchamp noted that volatility was nevertheless down once more, with calm prevailing for the moment.

“The $2,900 level is now in sight for gold, as the metal’s impressive rally goes on.

“Safe haven buying, central bank purchases and continuing softness in the dollar have made life much more amenable for the commodity, and if tariffs rear their head again we should see the metal make fresh gains.”

US private sector employment grows, UK services sector loses momentum

In economic news, private sector employment in the United States grew more than expected in January, according to fresh ADP data.

Employers added 183,000 jobs, exceeding forecasts of 150,000, while December’s total was revised up from 122,000 to 176,000.

Small and medium-sized businesses accounted for most of the gains, while large firms contributed 69,000 new positions.

The services sector led with 190,000 new jobs, offsetting a 6,000 decline in goods-producing industries.

Wage growth continued to cool, with year-over-year pay increases at 4.7% for job-stayers and 6.8% for job-changers.

“We had a strong start to 2025 but it masked a dichotomy in the labour market,” said Nela Richardson, chief economist at ADP.

“Consumer-facing industries drove hiring, while job growth was weaker in business services and production.”

On home shores, the UK services sector lost momentum as rising costs and cautious spending weighed on activity.

The S&P Global services PMI slipped to 50.8 from 51.1 in December, its lowest in 15 months and below expectations of 51.2.

While the reading remained above the neutral 50.0 mark, new business declined for the first time since October, with firms citing cost-cutting and investment delays.

Input prices rose, largely due to higher payroll costs, while job losses accelerated at the fastest rate in four years.

Tim Moore, economics director at S&P Global Market Intelligence, said the data highlighted the “challenging” business environment for service providers, with “stagflation conditions” appearing to take a firmer hold.

“A renewed downturn in new business volumes added to signs that the near-term UK economic outlook remains tilted to the downside,” he said.

“Business activity expectations for the year ahead weakened in response to subdued demand in January, with optimism now at its lowest since December 2022.”

UK new car sales meanwhile fell for the fourth consecutive month in January, with electric and hybrid vehicle growth failing to offset declines in petrol and diesel models, according to the Society of Motor Manufacturers and Traders.

On the continent, the eurozone economy showed signs of improvement, with the composite PMI rising to 50.2 in January, its first expansion in five months.

However, growth remained fragile, as the services PMI was revised slightly downward to 51.3 from an initial 51.4 estimate.

Meanwhile, eurozone industrial producer prices edged up 0.4% in December from the previous month but remained flat year-on-year.

For 2024, producer prices declined 4.2% in the eurozone and 4% across the EU.

Elsewhere, China’s services sector slowed in January, with the Caixin/S&P Global PMI falling to 51.0 from 52.2 in December.

Growth in new business softened, and employment declined at the sharpest rate since April 2024.

The early Lunar New Year holiday contributed to temporary business closures, particularly in hospitality.

Weaker demand also led to the first drop in backlogged work in six months, signaling both improved efficiency and softer economic activity.

The services slowdown mirrored weakness in manufacturing, adding to concerns over China’s broader economic recovery.

GSK rockets despite earnings miss, DCC in the red

On London’s equity markets, GSK surged 7.54% despite narrowly missing earnings expectations.

The pharmaceutical giant reported a 3% increase in annual sales to £31.38bn, slightly below the £32bn forecast, while core earnings per share of 159.3p also fell short of estimates.

However, investor sentiment remained positive after GSK raised its long-term sales outlook to more than £40bn by 2031, up from £38bn previously, and announced a £2bn share buyback over the next 18 months.

Mining stocks were among the session’s strongest performers, with Fresnillo climbing 5.47% as gold prices hit record highs.

JPMorgan reiterated its positive stance on the company, raising its price target and naming it its top pick among EMEA gold miners.

Fellow precious metals miner Hochschild Mining also gained 3.23%.

Housing-related equities saw gains, with private landlord Grainger rising 5.5% after reporting a 15% year-on-year increase in net rental income for the four months to January, driven by strong demand.

Housebuilder Crest Nicholson advanced 6.69% following an upgrade to ‘buy’ from Investec.

On the downside, DCC fell 3.55% after warning of weaker performance in its technology segment due to sluggish demand for consumer tech products in the UK and Europe during the holiday season.

Ferrexpo tumbled 8%, extending losses from Tuesday after revealing that its Ukrainian unit faced a £3bn civil claim over alleged improper sales of waste products.

Spirax Group declined 2.2% following a downgrade to ‘hold’ from HSBC, while Raspberry Pi weakened 0.54% after a similar downgrade from Jefferies.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,623.29 0.61%
FTSE 250 (MCX) 20,762.88 0.53%
techMARK (TASX) 4,712.93 1.03%

FTSE 100 - Risers

GSK (GSK) 1,485.00p 7.61%
Fresnillo (FRES) 755.00p 5.82%
Marks & Spencer Group (MKS) 357.60p 3.65%
Tesco (TSCO) 387.60p 2.70%
Land Securities Group (LAND) 587.50p 2.62%
Schroders (SDR) 362.80p 2.60%
Sainsbury (J) (SBRY) 263.60p 2.49%
LondonMetric Property (LMP) 187.70p 2.46%
BT Group (BT.A) 145.20p 2.36%
Beazley (BEZ) 836.50p 2.32%

FTSE 100 - Fallers

Diageo (DGE) 2,235.00p -3.97%
DCC (CDI) (DCC) 5,300.00p -3.55%
Croda International (CRDA) 3,110.00p -3.21%
Spirax Group (SPX) 7,765.00p -2.20%
Prudential (PRU) 655.00p -1.95%
Halma (HLMA) 2,940.00p -1.67%
Diploma (DPLM) 4,486.00p -1.45%
Ashtead Group (AHT) 4,972.00p -1.39%
Pershing Square Holdings Ltd NPV (PSH) 4,064.00p -1.31%
The Sage Group (SGE) 1,329.00p -0.86%

FTSE 250 - Risers

Crest Nicholson Holdings (CRST) 172.80p 6.69%
Grainger (GRI) 220.50p 5.50%
Trustpilot Group (TRST) 355.00p 4.87%
Savills (SVS) 1,068.00p 3.67%
Hammerson (HMSO) 290.00p 3.35%
PayPoint (PAY) 703.00p 3.23%
Wizz Air Holdings (WIZZ) 1,278.00p 3.08%
Endeavour Mining (EDV) 1,715.00p 3.00%
Ocado Group (OCDO) 310.00p 2.98%
Bellway (BWY) 2,660.00p 2.94%

FTSE 250 - Fallers

Ferrexpo (FXPO) 73.60p -8.00%
Foresight Group Holdings Limited NPV (FSG) 380.00p -5.00%
Indivior (INDV) 875.50p -4.32%
Oxford Instruments (OXIG) 2,025.00p -2.17%
Morgan Advanced Materials (MGAM) 262.50p -1.87%
Genus (GNS) 1,810.00p -1.84%
SThree (STEM) 251.00p -1.76%
Lancashire Holdings Limited (LRE) 629.00p -1.57%
Softcat (SCT) 1,578.00p -1.56%
Fidelity China Special Situations (FCSS) 230.00p -1.50%