15th May 2025 16:54
(Alliance News) - The FTSE 100 made solid progress on Thursday supported by better-than-expected UK growth figures and despite a mixed bag of data in the US.
The FTSE 100 index ended up 48.74 points, 0.6%, at 8,633.75. The FTSE 250 was up 25.19 points, 0.1%, at 20,844.76, and the AIM All-Share was up 0.23 of a point at 731.85.
The Cboe UK 100 was up 0.7% at 861.31, the Cboe UK 250 was up 0.2% at 18,231.74, while the Cboe Small Companies fell 0.5% at 15,842.49.
Sentiment got an early boost as figures showed the UK economy grew faster-than-expected in the first quarter.
According to the Office for National Statistics on Thursday, UK gross domestic product is estimated to have grown by 0.7% in the quarter from January to March.
This is accelerated from 0.1% growth in the prior quarter and outperformed an FXStreet-cited consensus for 0.6% growth.
Peel Hunt's Kallum Pickering said the upside surprise versus already high expectations offers a "timely dose" of positive UK news against an uneasy global economic backdrop.
But he expects momentum to soften "appreciably" in the second quarter as the April rise in employer national insurance contributions and household energy prices hampers domestic demand, while rising global trade uncertainty impairs activity in trade-oriented industries.
Deutsche Bank's Raja agrees that the jump in GDP will "likely be short-lived".
Trade uncertainty will likely hit its peak in the second quarter, he forecast, with exporters likely to see reduced demand as well from higher US tariffs and weaker global demand.
Inventories piled up over the last two quarters will also start to unwind more fully, dragging on GDP, he added.
"Crucially, higher unemployment and a drop off in real wage growth won't help household spending much either, as firms continue to tighten payrolls and pass on payroll cost increases," he noted.
In European equities on Thursday, the CAC 40 in Paris was up 0.2% and the DAX 40 in Frankfurt ended 0.7% higher.
In New York, the Dow Jones Industrial Average was up 0.2%, the S&P 500 index was up 0.1% and the Nasdaq Composite up was down 0.3%.
Investors weighed a slew of data which showed progress on inflation but lacklustre retail sales and industrial production.
On the plus side, US producer price inflation abated last month, undershooting market expectations, a report showed.
According to the Bureau of Labor Statistics, producer prices rose 2.4% on-year in April, slowing from a 2.7% climb in March. Prices had been expected to rise by 2.5% annually in April, according to consensus cited by FXStreet, so the actual fell short of forecasts.
It was the tamest annual rise in the US producer price index since September last year.
But US industrial production remained put in April, compared to a decline of 0.3% in March. It was below the FXStreet-cited consensus of a 0.2% climb for April.
The Census Bureau, meanwhile, said US retail sales increased 0.1% in April from March, beating the FXStreet-cited market consensus. The forecast was for sales to be flat. Sales growth slowed from 1.7% in March from February.
ING said the figures suggests "only modest tariff impacts so far" although it cautioned that may not last for long.
Walmart, which fell 1.2% after reporting first quarter earnings, warned that tariffs and increasing economic turbulence means it expects to raise prices.
The pound was quoted lower at USD1.3279 late on Thursday in London, compared to USD1.3302 at the equities close on Wednesday. The euro stood at USD1.1178, lower against USD1.1208. Against the yen, the dollar was trading at JPY145.81, lower compared to JPY146.43 on Wednesday.
On the FTSE 100, Hikma Pharmaceuticals rose 7.4% after it unveiled new medium-term guidance forecasting high single-digit revenue and operating profit growth in the three years to 2027.
The London-based pharmaceutical group expects compound annual revenue growth of 6% to 8% in the three years to 2027 with core operating profit growth of 7% to 9% over the three-year time frame to 2027.
In 2024, Hikma reported revenue of USD3.13 billion and core operating profit of USD719 million.
In April, Hikma said it expected revenue to grow by 4% to 6% in 2025 and for core operating profit to be in the range of USD730 million to USD770 million, would be growth of 4.3% at the mid-point.
In addition, Hikma is introducing a five-year target for revenue to reach USD5 billion by 2030.
Jefferies said the USD5 billion target "is welcome to give visibility on the direction of group aspirations," and above USD3.9 billion consensus.
JD Sports climbed 1.4% after M&A in the sector saw Dick's Sporting Goods agree to acquire Foot Locker for USD2.4 billion.
National Grid rose 3.2% after well received annual results while Aviva was also in the green, up 2.4%, after its first quarter trading update.
But Sage Group fell 4.2% as in-line results failed to stir investors.
The Newcastle-upon-Tyne, England-based accounting software manufacturer said pretax profit increased to GBP236 million in the six months ended March 31, from GBP203 million the previous year. Basic earnings per share rose 19% to 18.2 pence from 15.3p.
Revenue increased 8% on-year to GBP1.24 billion from GBP1.15 billion.
A drop in the oil price weighed on BP, down 3.9% and Shell, down 2.0%. The index heavyweights also traded ex-dividend.
Brent oil was quoted at USD64.28 a barrel on Thursday, down from USD66.01 late Wednesday.
Russ Mould at AJ Bell noted traders focused on the prospect of a "US/Iran nuclear deal which could see economic sanctions lifted on the latter and potentially lead to greater supplies of oil."
Elsewhere, Watches of Switzerland rose 5.2%. It expects to report a full year performance in line with market expectations. Revenue in the year to April 27 advanced 7% to GBP1.65 billion, the luxury watches seller said in a trading statement.
"As we enter FY26, although we are mindful of the uncertain macroeconomic backdrop, including potential US tariff changes, we remain confident in the strong fundamentals of the luxury watch category and our differentiated business model in the underdeveloped US market," it said.
Gold advanced to USD3,213.28 an ounce on Thursday against USD3,184.56 on Wednesday.
Friday's economic calendar has a GDP reading in Japan overnight, eurozone trade data and the Michigan consumer sentiment index.
The local corporate calendar on Friday has full-year results from property investor Land Securities.
By Jeremy Cutler, Alliance News reporter
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