15th May 2025 08:02
(Alliance News) - London's FTSE 100 is called down on Thursday, as UK economic growth beats expectations in March and new data shows foreign investment slipped during 2024.
The UK economy grew at a faster pace than anticipated in the first quarter of 2025, while the goods and services trade deficit narrowed further from the previous quarter.
Meanwhile, "the news of fresh deals is coming in from the Middle East as Donald Trump seems very successful in getting the oil- and gas-rich countries to buy stuff from the US – including chips and planes – but appetite for trade optimism is starting to show signs of exhaustion," commented Swissquote analyst Ipek Ozkardeskaya.
"Despite the announcement of a USD243 billion deal with Qatar on top of the USD600 billion deal with Saudi Arabia, the S&P 500 traded flat on Wednesday."
In early corporate news, United Utilities reports its profit nearly doubled during its most recent financial year, while Greencore agrees the terms of its bid for FTSE 250 peer Bakkavor.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called down 0.1% at 8,580.51
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Hang Seng: down 0.9% at 23,438.21
Nikkei 225: closed down 1.0% at 37,755.51
S&P/ASX 200: closed up 0.2% at 8,294.50
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DJIA: closed down 89.37 points, or 0.2%, at 42,051.06
S&P 500: closed up 6.03 points, or 0.1%, at 5,892.58
Nasdaq Composite: closed up 136.73 points, or 0.7%, at 19,146.81
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EUR: up at USD1.1223 (USD1.1208)
GBP: down at USD1.3300 (USD1.3302)
USD: down at JPY145.53 (JPY146.43)
Gold: down at USD3,150.20 per ounce (USD3,184.56)
(Brent): down at USD63.99 a barrel (USD66.01)
(changes since previous London equities close)
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ECONOMICS
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Thursday's key economic events still to come:
10:00 BST eurozone industrial production
10:00 BST eurozone employment change
10:00 BST eurozone GDP
13:30 BST US PPI
13:30 BST US retail sales
13:30 BST US initial jobless claims
13:30 BST US New York empire state manufacturing index
13:30 BST US Philadelphia Fed manufacturing index
14:15 BST US industrial production
15:00 BST UK Bank of England Monetary Policy Committee member Swati Dhingra speaks
15:30 BST US EIA natural gas stocks
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UK gross domestic product is estimated to have grown by 0.7% in the quarter from January to March, according to data from the Office for National Statistics on Thursday. This is accelerated from a 0.1% growth in the prior quarter and outperforms an FXStreet-cited consensus for 0.6% growth. This was driven by a 0.7% rise in the services sector and a 1.1% increase in production, noted the ONS. The construction sector showed no growth. On-year, GDP in the first quarter was up 1.3%, beating a 1.2% FXStreet consensus. It slowed from 1.5% on-year growth in the fourth quarter of 2024. GDP rose 0.2% in March alone, slowing from 0.5% in February but still beating an FXStreet consensus for no growth in the month. Real GDP per head is estimated to have grown by 0.5% in the three-month period, following two consecutive quarterly declines. Export volumes increased by 3.5%, following three consecutive quarterly declines, driven by a 5.6% rise in goods exports and a 2.0% growth in services exports. Import volumes were up 2.1% in the first quarter, boosted by 0.6% and 5.2% rises in goods and services imports respectively.
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The UK total goods and services trade deficit narrowed by GBP3.6 billion to a deficit of GBP6.6 billion in the three months to March. The trade in goods deficit narrowed by GBP4.3 billion to GBP55.2 billion in the first quarter, while the trade in services surplus is estimated to have narrowed by around GBP700 million to GBP48.6 billion. Imports from non-EU countries fell by GBP600 million, or 2.5%, while imports from the EU increased by GBP200 million, or 0.9%. Exports of goods to the US increased for its fourth consecutive month with a GBP2.4 billion rise in the first quarter. Imports of goods from the US rose GBP1.3 billion.
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Foreign investment in the UK declined last year as funding from the US slipped, new data shows. The UK secured fewer investment projects than France for the fifth year in a row, according to EY's annual UK attractiveness survey. The number of foreign direct investment projects totalled 853 in 2024, down 13% on 2023's total. It was also behind the 1,025 secured by France during the year, but ahead of Germany's 608. US spending on projects fell by 11% in Europe and 7% in the UK, helping drag on the overall total. Meanwhile, the UK secured half of all Indian funding into projects in Europe. The technology sector attracted the most investment in the UK, followed by transport manufacturers which include carmakers and aerospace firms.
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Prime Minister Keir Starmer will host EU chiefs in London on Monday for a major summit designed to progress a deeper relationship between the UK and the bloc than the one negotiated by the previous Conservative government. But Starmer will be wary of giving ammunition to arch-Eurosceptic Nigel Farage's Reform UK party, while also conscious that US President Donald Trump views the EU negatively. "He's walking two tightropes at the same time," said British foreign policy expert Richard Whitman, describing immigration as a "salient" issue in the UK and Trump's attitude to the EU as "hostile". "Starmer is balancing this big international issue and also the domestic politics one, and that's what makes it so tricky for the prime minister," the politics professor told AFP. Starmer hopes closer relations with the bloc can spur his main ambition of economic growth but he has vowed to honour the Brexit result, not rejoin the single market, customs union or return to free movement of people. He has been publicly reticent about an EU-proposed youth mobility scheme that would allow British and European 18- to 30-year-olds to study and work in the UK and vice versa, although the UK government has made warmer noises in recent weeks about a possible controlled programme.
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US President Donald Trump on Thursday closes a Middle East tour in the United Arab Emirates as he focuses squarely on seeking deals after billions of dollars of pledges from Saudi Arabia and Qatar. The first major trip of his second term had been scheduled to end Thursday but Trump did not rule out continuing on to Turkey if Russian President Vladimir Putin shows up for talks with Ukraine.
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BROKER RATING CHANGES
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Berenberg cuts Spirax price target to 7,000 (7,700) pence - 'hold'
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UBS raises Burberry to 'buy' (neutral) - price target 1,400 (918) pence
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Berenberg starts GB Group with 'buy' - price target 340 pence
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COMPANIES - FTSE 100
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National Grid reports pretax profit of GBP3.65 billion for its financial year that ended March 31, rising 20% from GBP3.05 billion the year before. Revenue is despite revenue declining 7.4% to GBP18.38 billion from GBP19.85 billion, as other operating costs are reduced by 13% to GBP13.24 billion from GBP15.21 billion. The group declares a total dividend of 46.72 pence per share, down 20% on-year from 58.52p. Earnings per share decline 8.1% to 60.0p from 55.5p, while capital investment is increased 20% to GBP9.85 billion from GBP8.24 billion. Chief Executive Officer John Pettigrew says: "Strong performance across all areas of the business underpins our plans to successfully invest [around] GBP60 billion over five years. At a time of international economic uncertainty, National Grid continues to provide stable and predictable growth through our resilient business model." National Grid targets an asset compound annual growth rate of around 10% over the next five years to financial 2029, as well as an underlying EPS compound annual growth rate of 6% to 8%.
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United Utilities delivers GBP355.0 million in pretax profit for the year that ended March 31, more than doubled from GBP170.0 million a year prior, as revenue grows 10% to GBP2.15 billion from GBP1.95 billion. Earnings per share doubled to 38.8 pence from 18.6p, and the firm declares a total dividend of 51.85p per share, up 4.2% on-year from 49.78p. Looking ahead, United Utilities expects financial 2026 revenue between GBP2.5 billion and GBP2.6 billion. Chief Executive Officer Louise Beardmore says: "Our long-term strategy of investment helped us cut spills per storm overflow by 24% last year, a total of 20,000 fewer spills and the biggest year-on-year reduction in the sector. We are one of only three companies to have achieved our customer targets for services provided to families, businesses and housing developers every year, and at the same time we have helped more than 400,000 households in the North West with affordability support since 2020. Looking to the future, we have already started work on our ambitious GBP13 billion plan for the next five years - the biggest investment in improving water and wastewater infrastructure in more than a century. We're proud our plans will deliver a huge boost to customers and communities across the North West, supporting 30,000 jobs and creating an estimated GBP35 billion of economic value for the region."
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COMPANIES - FTSE 250
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Greencore Group says pretax profit nearly doubled in the six months that ended March 28, rising to GBP26.7 million from GBP14.7 million the year before. Revenue grows 6.5% to GBP922.0 million from GBP866.1 million, while basic earnings per share are up 80% to 4.5 pence from 2.5p. The group records a 13.1% return on invested capital for the six-month period, against 10.2% a year prior. "While we are mindful of a challenging market environment, and with our seasonally stronger second half still ahead of us, we now expect adjusted operating profit for FY25 to be ahead of previous guidance, in the range of GBP114 million - GBP117 million," says Chief Executive Officer Dalton Philips. Greencore also on Thursday announces it has reached an agreement of the terms of its proposed acquisition of FTSE 250 peer Bakkavor. The offer values Bakkavor at around GBP1.2 billion, and will see Greencore pay 85p in cash plus 0.604 new Greencore shares per Bakkavor share. Bakkavor shareholders are also to get 1 contingent value right per Bakkavor share. Subject to shareholder approval, Greencore expects the takeover to become effective in early 2026.
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OTHER COMPANIES
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Flutter Entertainment completes its acquisition of an initial 56% stake in Betnacional brand operator NSX Group for around USD350 million. Betnacional is a "leading" sports betting and iGaming brand in Brazil. The acquisition is expected to contribute USD220 million in additional revenue to Flutter in 2025, as well as an adjusted loss before interest, tax, depreciation and amortisation of USD70 million. Flutter notes that a mechanism has been put in place to enable it to increase its shareholding via reciprocal put or call agreements five to ten years following the completion of the deal. Flutter Chief Executive Officer Peter Jackson says: "The transaction demonstrates Flutter's powerful optionality as an 'and' business and aligns perfectly with our strategy for value creating [mergers & acquisitions]. The combination of NSX's extensive local expertise, alongside our existing Brazilian business and the advantages of the Flutter Edge, creates a compelling opportunity to capitalize on the exciting runway of future growth in Brazil."
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By Emily Parsons, Alliance News reporter
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Related Shares:
Spirax-SarcoBurberryGb GroupNational GridUnited UtilitiesGreencoreBakkavorFlutter Entertainment