FTSE 100 Live Wednesday
- UK PMI falls on tariffs shock
- Tax rise warning as borrowing jumps
- Heathrow resumes dividend payments
Market update: FTSE 100 rallies, Croda up 10% and Reckitt down 5%
10:16 , Graeme EvansThe shares of BP, HSBC and Glencore rebounded by 4% today as global investors clung to hopes of a de-escalation in the US-China trade war.
The FTSE 100 index rallied by 1.5% or 128.44 points to 8457.04, marking a big step up in the pace of its eight day winning run.
London’s top flight is about 150 points below where it stood prior to Donald Trump’s Liberation Day tariffs, having fallen as far as 7679 on 9 April.
US futures are also pointing to further gains after Wall Street rallied last night on relief that Trump has no plans to fire Federal Reserve chair Jerome Powell.
Treasury Secretary Scott Bessent also reportedly described the tariff standoff with China as unsustainable and said he expects the situation to de-escalate.
UBS Global Wealth Management said: “While the twists and turns of trade negotiations are likely to keep volatility elevated, recent signals suggest a more constructive approach to resolving disputes.”
The bank added that the stabilisation in markets may also reflect relief that the first quarter earnings season is not as bad as initially feared.
The gold price fell back to $3315 an ounce from yesterday’s record $3500 while demand optimism lifted the price of Brent Crude to $68.36 a barrel.
This fuelled a recovery for BP, which has been one of the past month’s hardest hit London stocks due to worries over the sustainability of share buybacks.
The oil giant’s rebound of 16.2p to 375.15p also reflected yesterday’s disclosure that activist investor Elliott has built a stake of more than 5%.
Demand hopes also helped lift Shell shares by 67.5p to 2499.5p, while Glencore and Anglo American put back 10.65p to 266.95p and 95p to 2129p respectively.
Asia-focused lenders HSBC and Standard Chartered also benefited from hopes that a worst-case scenario on China tariffs can be avoided.
The pair have underperformed the wider banking sector over the past month but today rose 30.6p to 830.9p and 49p to 1071.5p respectively.
Speciality chemicals company Croda International led the top flight after it reported an encouraging start to its financial year.
Sales of £442 million were 9% higher on a constant currency basis, leaving first quarter pre-tax profits in line with expectations.
Shares in the East Yorkshire-based firm rallied 10% or 270p to 2994p, still 10% lower so far this year after trade tariffs dealt a setback to recovery hopes.
Reckitt Benckiser moved the other way, sliding 5% or 250p to 4700p after first quarter underlying sales growth of 1.1% missed City hopes.
The consumer goods giant called the performance “solid”, driven by the strength of its core brands and continued growth in emerging markets.
It reiterated guidance for the full year but also warned the planned sale of its Cillit Bang and Air Wick arm might be delayed by market conditions.
UK PMI reading turns negative amid tariffs shock
09:46 , Graeme EvansPrivate sector output has fallen for the first time in 18 months after US tariffs led to the sharpest fall in new export orders since May 2020.
The S&P Global Flash UK PMI for April recorded a worse-than-expected score of 48.5, which compares with 51.5 in March.
It is the first time below the neutral 50 threshold since October 2023 and the lowest reading since November 2022.
Weaker demand from overseas weighed on business activity in both the manufacturing and service sectors, reflecting the impact of US tariffs and loss of confidence among clients.
Chris Williamson, chief business economist at S&P Global Market Intelligence said the decline was consistent with GDP declining at a quarterly rate of 0.3%.
He added: “The collapse in confidence and drop in output during April raise red flags as to the near-term economic outlook and add pressure on the Bank of England to reduce interest rates again at its May meeting.
“There will be some uncertainty, however, as to whether the recent upturn in price pressures could become entrenched or whether it merely represents a short-term tax-related spike which should be 'looked through'.”
Trade optimism lifts European markets, US futures higher
09:00 , Graeme EvansEuropean markets have rallied after the Trump administration provided some cause for optimism on the outlook for trade negotiations.
The FTSE 100 index stands 1.3% higher, while the Dax in Frankfurt and Cac40 in Paris are up by 2.3% and 1.9% respectively.
US futures are also pointing to further gains after Wall Street rallied yesterday on relief that Donald Trump does not intend to oust Federal Reserve chair Jerome Powell.
Treasury Secretary Scott Bessent also reportedly described the current tariff standoff with China as unsustainable and said he expects the situation to de-escalate.
UBS Global Wealth Management said: “The more conciliatory tone from the White House on trade talks is in line with our view that a worst-case scenario on tariffs can be avoided.
“Our base case is that the effective US tariff rate excluding China will settle in the 10–15% range, with Canada and Mexico remaining largely exempt.
“While the twists and turns of trade negotiations are likely to keep volatility elevated, recent signals suggest a more constructive approach to resolving disputes.”
The bank added that the stabilisation in markets may also reflect relief that the ongoing first quarter earnings season is not as bad as feared.
Heathrow pays first dividend in five years
08:44 , Graeme EvansHeathrow airport has paid a dividend to shareholders for the first time in five years.
The west London airport said it completed the £250 million transaction on March 7 “as a result of our strong operational and financial performance in 2024”.
French company Ardian recently completed a deal to become Heathrow’s largest shareholder with a 23% stake, while Saudi Arabia’s sovereign wealth fund purchased a 15% holding.
The dividend disclosure came as Heathrow said 18.2 million passengers travelled through the airport’s four terminals between January and March.
The 1.6% decline from a year earlier was attributed to the timing of Ramadan and Easter, along with the 10-hour closure on March 21 because of a power outage caused by a fire at a nearby electricity substation.
THG rejects Myprotein bid approach
08:37 , Graeme EvansTHG has rejected a bid approach worth up to £600 million for its online sports nutrition brand Myprotein.
The company, which also owns Cult Beauty, said it rebuffed a “largely unfunded” and “highly conditional” approach from Selkirk – a firm set up by two early backers of THG, including its previous chairman Iain McDonald.
The cash-and-shares proposal valued the Myprotein business at between £400 million and £600 million.
THG’s FTSE 250-listed shares lifted 4% or 1.1p to 30.1p following the disclosure.
HSBC and BP drive FTSE 100 advance, Reckitt down 4%
08:21 , Graeme EvansThe FTSE 100 index has risen another 1.3% or 105.66 points, leaving London’s top flight benchmark at a fresh two-week high of 8434.26.
BP rose 4% or 13.45p to 372.4p after the Brent Crude price recovered 1.4% to $68.40 a barrel and activist investor Elliott took its stake to more than 5%.
Shell added 2% or 51p to 2483p, while Anglo American put back 3% or 66p to 2100p and Glencore advanced 9.8p to 266.1p.
Hopes for an easing of US-China trade tensions also helped Standard Chartered and HSBC shares to jump 5% or 52p to 1074.5p and 4% or 29.4p to 829.7p respectively.
Consumer goods group Reckitt Benckiser fell 220p to 4730p after first quarter like-for-like sales growth of 1.1% came in short of City targets.
Setback for Chancellor as borrowing tops forecasts
07:45 , Graeme EvansThe UK government borrowed a bigger-than-expected £16.4 billion in March, the third highest figure for the month since records began in 1993.
The £2.8 billion increase on last year came despite robust wage growth leading to a higher-than-expected figure for tax receipts of £93.5 billion.
Today’s update means that borrowing for the financial year amounted to £151.9 billion, an increase of £20.7 billion on a year earlier and equivalent to 5.3% of GDP.
It is also £14.6 billion more than the £137.3 billion forecast by the Office for Budget Responsibility (OBR).
Capital Economics said Chancellor Rachel Reeves faces more bad news as the recent surge in borrowing costs has whittled down the headroom against the fiscal mandate from £9.9 billion to £7.7 billion
It adds that the OBR has yet to incorporate the likely upward impact on borrowing from the tariff shock.
The consultancy said: “All of this means that Reeves may not be too far away from having to raise money again in the Autumn Budget, by cutting spending and/or raising taxes, to meet her fiscal rules.”
Tesla shares rally despite results miss
07:25 , Graeme EvansTesla shares weathered below-forecast first quarter results after Elon Musk said he planned to spend significantly less time on his US government efficiency role.
Revenues fell 9% to $19.3 billion, which compared with Wall Street estimates of more than $21 billion, while operating income of $399 million was also a big miss.
Tesla said it would revisit guidance for 2025 revenues in its second quarter update.
The shares rallied 5% in extended hours after the company reiterated its production plans, including for more affordable vehicles.
The stock is down 41% year-to-date, resulting in a market value of $750 billion.
FTSE 100 run picks up speed, gold price falls back
07:04 , Graeme EvansThe FTSE 100 index is seen 1.1% higher after last night’s rebound for US markets.
Wall Street rallied on comments by President Trump that he has no plans to oust Federal Reserve chair Jerome Powell.
The Dow Jones Industrial Average and the Nasdaq Composite rose 2.7% and the S&P 500 index by 2.5%.
Tesla shares improved 5% and added a further 5% in after-hours dealings, despite the car maker’s first quarter results coming in below forecast.
The FTSE 100 index lifted 0.6% yesterday, meaning it has risen for seven consecutive sessions. The gold price is at $3308 an ounce, having hit a record $3500 yesterday.
