- FTSE 100 closes 49 points higher
- UK GDP growth surprises to the upside
- Aviva (LON:AV) results in line with forecasts
- Sage and 3i (LON:III) Group lead fallers after their results
4.59pm: FTSE in the green
The FTSE 100 Index closed at 8,634, up 49 points, or 0.6%, on the day.
4.13pm: FTSE battles back
The FTSE 100 has battled back from a dodgy start and looks to be set to close out the day at around a six-week high.
Hikma is top of the leaderboard, with the generic drugmaker up almost 7% after hiking its outlook.
Results boosted several names, including Compass, which had results earlier in the week, National Grid (LON:NG), Aviva and United Utilities (LON:UU).
JD Sports jogged 2.5% higher on a report that US rival Foot Locker (NYSE:FL) was a bid target.
Sector themes were for precious metals and ’defensive’ stocks, including gains for defence and aerospace, with BAE Systems (LON:BAES), Rolls, Babcock (LON:BAB) all rising, along with healthcare and utilities, as Smith & Nephew, ConvaTec (LON:CTEC), Vodafone (LON:VOD) and Severn Trent (LON:SVT) all climbed.
The day’s fallers were led by 3i Group and Sage, down 4.2% and 3.7% as both reported results that seemed solid overall but had details that disappointed investors and with the shares near highs, resulted in some profit-taking.
3.40pm: US data deluge
A torrent of US macroeconomic data in the past while.
Retail sales inched up 0.1% last month, the US Commerce Department has revealed, much softer than the 1.7% jump seen in March.
That surge was estimated by economists to have been the result of consumers stocking up on goods before the US tariffs kicked in.
US factory-gate inflation was also in negative territory, with headline April producer prices index down 0.5%, well below the consensus, 0.2%. Net revisions were -0.9%. Core PPI dropped by 0.4%, also greatly below the consensus, +0.3%. Net revisions were -0.8%.
US industrial production was unchanged in April, slightly below the consensus forecasts of a 0.2% increase. Manufacturing production fell 0.4%, which was below the consensus estimate of -0.3%.
Market analyst Chris Beauchamp at IG says: "While investors remain alert for any sign of weakness in US data, today’s retail sales and Walmart earnings have yet to show indicators of a slowdown."
Factory-gate inflation being in negative territory is "piling on the pressure on the Fed to move", though he notes that since PPI excludes imports, the actual impact of tariffs has yet to show up.
"Overall sentiment was supported by news that EU and US representatives will begin discussions, raising hopes of a truce on yet another front of Donald Trump’s wide-ranging trade war."
3.05pm: Dollar weakness to continue, says DB
"We have a problem," says George Saravelos, Deutsche Bank (ETR:DBKGn)’s global head of FX research.
"It is simple. The US cannot close its very large current account deficit unless it closes its fiscal deficit too.
"But over the last few days we are learning something very important: the US appears unwilling to do that."
He points to the emerging reconciliation bill from the US Congress that suggests ever-wider fiscal deficits above 6%, with the US-China trade accord effectively signalling "a very low pain threshold on taxing (tariffing) the US consumer".
"In all, even if we account for the (now diminished) revenues from tariffs the US budget deficit will keep growing. The current account deficit will likely keep widening in this scenario too."
While the US has expressed a desire to reduce its twin deficits, "but actions speak louder than words" and Saravelos says he worries "this is brewing a major problem for the dollar and potentially the US bond market too".
The US’s net international investment position is the most rapidly deteriorating and largest in the world, which is reflective of three things, he says: very large foreign ownership of US assets, extreme valuation of dollar assets and the very expensive dollar itself.
"Running a wider fiscal deficit requires foreigners to buy an ever-expanding amount of US Treasuries and an ongoing rise of America’s foreign liabilities. This, we believe, is no longer sustainable."
The market’s conclusion is that for foreigners to continue financing US debt, the non-dollar price of US Treasuries needs to decline, "either via currency depreciation or a drop in the price of the bonds".
Falling prices for Treasuries will make US debt dynamics even worse, "so is not sustainable", meaning the only solution to this problem is dollar weakness, he says.
"That will effectively lead to a capital writedown of foreign holdings of US assets and an improvement in America’s net external asset position, making it easier to finance new issuance again," Saravelos says, arguing that this dynamic is already playing out.
2.52pm: US stocks down
Wall Street has woken in a negative mood, hit by disappointing updates from Walmart, Humana (NYSE:HUM) and UnitedHealth (NYSE:UNH), with profit taking hitting tech.
The S&P 500 has opened 0.4% lower, while the Dow Jones is down 0.5% and the Nasdaq down 0.7%. The small cap Russell 2000 has dipped 0.2%.
UnitedHealth shares are down 15%, with a report from the Wall Street Journal that the insurer is being investigated by the Justice Department for possible Medicare fraud.
The company said in a statement it was not notified about the “supposed criminal investigation reported,” but that the company stood by “the integrity of our Medicare Advantage program.”
Humana, another Medicare company, is down 5%.
Walmart fell on the back of its earnings, where it warned that it will have to start raising prices this month due to new tariffs.
1.28pm: US growth still likely to be affected by tariffs, so Fed will hike
While the new US easing of its tariffs stance with China should soften the negative impact on growth, it is unlikely to prevent a further economic slowdown, UBS reckons.
The Swiss bank has updated its US economic forecasts to account for a recent shift in US-China trade policy, which saw tariffs on Chinese imports reduced to 10% from a previously planned 125%.
The change is expected to reduce the drag on US economic growth and moderate inflationary pressures, but the Federal Reserve is still likely to be left "in a pickle" and face a challenging balancing act.
UBS said it still expects the Fed will begin cutting interest rates by 100 basis points starting at the September FOMC meeting, with a predicted weakening of the jobs market later this year preventing a more aggressive stance.
"While lower tariffs reduce the growth headwind and inflationary pressure, they do not eliminate the Fed’s dilemma. We still expect the FOMC to cut rates by 100 bps starting in September, given the weakening labor market," UBS said.
12.33pm: FTSE moves higher as US futures drop
The FTSE 100 has moved into positive territory, up 0.3%, helped by gains for Hikma Pharmaceuticals (LON:HIK), JD Sports, Aviva and National Grid.
Hikma has just put out an update on its outlook, seeing strong medium-term annual revenue growth of 6% to 8%, with a 7% to 9% in core operating profit.
Other European stock market indices are mixed, with Germany’s DAX just below flat and France’s CAC down 0.2%.
US stock futures are in the red, with the S&P 500 and Dow Jones declining 0.3% and the Nasdaq down 0.5%.
12.01pm: Mortgage repossessions
Mortgage repossessions are rising, data from the Ministry of Justice shows.
Mortgage possession claims rose to 6,765 in the first quarter of the year, up 31% from a year earlier.
Reposession orders rose from 3,013 to 4,624, or 53%, while warrants climbed 20% to 3,517 and repossessions by county court bailiffs jumped from 769 to 1,092, a 42% increase.
11.46am: Citi sees oil falling further
Oil prices are down 3.4%, Citi reckons oil "may fall again" due to geopolitical dealmaking in the Middle East and Russia-Ukraine.
Front-month Brent crude futures have continued rising to over $66 a barrel from recent lows around $60 as US-China trade negotiations have begun, with Presidents Trump and Xi’s representatives agreeing sharp cutbacks in bilateral tariff levels for 90 days.
Citi has raised its 0-3-month price view slightly to $60 for Brent, but keeps its Q2 and Q3 Brent averages at $62 and $63 respectively, "still looking for a downward move, as we see probabilities skewing toward a US-Iran nuclear deal".
If talks fall through and the situation escalates, oil could move to $70-plus, is the US bank’s view.
"Oil had previously sold off as OPEC+ announced a larger ~400-k b/d unwind of output cuts in June, but found support as US oil producers began announcing reduced activity on lower oil prices.
"This week, all eyes are on President Trump in Saudi Arabia, Qatar, and the UAE, discussing topics that could include an Iran nuclear deal, while Zelensky may meet Putin in Turkey."
11.12am: Trump update
There have been lots of headlines coming out of Donald Trump’s Middle East trip this morning, where he arrived in Qatar following a visit to Saudi Arabia.
The focus in Saudi was semiconductors and defence deals, with today’s themes remaining on defence cooperation, regional security and investment deals.
During a press conference in Doha, Trump announced a $42 billion agreement to supply Qatar with advanced aircraft and military equipment, a move he described as part of America’s commitment to supporting its partners in the region.
Alongside this, Qatar will invest $10 billion in expanding the US military’s Al Udeid Air Base over the coming years, further solidifying its strategic partnership with Washington.
Trump claimed that the Middle East tour had already raised trillions of dollars in investments, with a potential total of at least $10 trillion.
He also used his visit to reaffirm US security guarantees, telling regional leaders that the US remains a protective force and also commented on Iran, declaring the country "bankrupt" and suggesting the US was "very close" to reaching a new deal with Tehran.
On technology, Trump said he had spoken to Apple (NASDAQ:AAPL) CEO Tim Cook, who he discouraged from expanding production in India, but claimed India had offered a tariff-free trade deal to the US.
Negotiations with China were said to be progressing, with a "new mechanism" for trade talks in place.
Trump’s next destination is Turkey, where he suggested he may visit on Friday, if deemed "appropriate" for Ukraine-Russia talks.
10.44am: Taxpayer’s stake in NatWest now below 1%
The UK government stake in NatWest Group PLC (LSE:LON:NWG) has now fallen to 0.90%, following a further sale by HM Treasury.
At the last update, the shareholding stood at 1.98%.
10.23am: JD Sports rises on Dick’s Foot Locker reports
JD Sports Fashion PLC (LSE:LON:JD.) shares are up 3.3% as investors warmed to the idea that a potential tie-up between Dick’s Sporting Goods and Foot Locker might help its US operation.
Analyst Jonathan Pritchard said it was a "seemingly well-informed story in the WSJ".
Foot Locker is "not exactly a distressed asset", but he sees "major execution risk" as Dick’s would be "buying stores that need a tactical and strategic overhaul, and with zero historic experience in the space we believe that will be difficult".
Pritchard adds: "We think that there could be a significant opportunity here for FL’s peers, especially JD Sports, to win market share as FL undergoes this strategic overhaul."
9.53am: Oil drag on FTSE
The FTSE is off its earlier lows, helped by rises for National Grid and some aerospace and defence names, including BAE Systems and Rolls-Royce (LON:RR).
BP (LON:BP) and Shell (LON:SHEL) are a big weight on the index still, with their shares going ex-div and crude oil prices now down 3.6% on the day as Donald Trump remarks that US and Iran are getting closer to a deal on the country’s nuclear program.
Saxo’s market analyst Neil Wilson says: "This will most like be in exchange for sanction relief, potentially adding to OPEC+ supply moving forward, which has already turned in the direction of more output."
What about the GDP figures? "No one cares about backward-looking GDP figures for the blue chips - it’s all about oil and basic resources today," says Wilson.
On the Footsie’s biggest faller this morning, 3i Group, which is down almost 7%, Wilson says it is an interesting story, given the recent commitment by pension funds to invest in private companies and the UK.
Results "somewhat disappointed", despite a total return over the year of 25%, with the market reaction seemingly about its main investment, Action (WA:ACT), with "some underwhelming news from elsewhere in the portfolio".
ITV (LON:ITV) shares are down 3.3% after its first-quarter update. They key guidance on ad revenues this year "looks soft but not too far beyond what was already expected", Wilson opines.
With Trump’s rowing back on tariffs and other dealmaking, the macroeconomic uncertainty "may recede now and loosen purse strings at the big advertisers", Wilson adds.
9.13am: Serco up on Royal Navy wins
Serco Group PLC (LSE:LON:SRP) shares are up 7% after the outsourcing group secured three contracts worth more than £1 billion to support the Royal Navy, adding momentum to a growing list of defence-related wins.
The largest of the new deals is an £850 million contract over ten years to provide marine services at key naval bases including Portsmouth, Devonport and Faslane covering vessel towing, crew transport and barge cleaning.
Serco also won a £70 million contract for inshore military training support and a £110 million deal for offshore training operations.
8.58am: Views on the UK GDP figures
The UK GDP bump of 0.7% in the first quarter will be "short-lived", says Sanjay Raja, chief UK economist at Deutsche Bank.
"What drove output higher? In short, a little bit of household consumption, but a whole lot of business investment and exports," he says.
Business investment shot up 6% and exports 3.5%.
"Looking at the detail, it’s clear that some front-running of trade was in play, with inventories staying in healthy territory and export growth concentrated in material manufactures. Investment was also focussed primarily on transport (aircrafts in particular), ICT, and machinery – all things likely to have been subject to [heightened] trade uncertainty.
"The jump in GDP will likely be short-lived, however. Trade uncertainty will likely hit its peak in Q2-25. Exporters will likely 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. 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."
Ben Kumar, head of equity strategy at 7IM, says the GDP of 0.2% in March, compared to 0.1% that the market was expecting, is nothing to write home about.
"Ignore the comparisons with other G7 nations... And ignore the “ahead of expectations”. What’s 0.1% when the average revision is more like 1% over the long-term.
"Probably, it indicates that all else equal, the UK’s actually not in a bad place economically. Unfortunately, all else isn’t equal. Lots of the export growth may have come from US companies getting ahead of tariffs. And while the service sector is delivering, it’s probably the area most subject to short-term swings in confidence.
"Really, what’s needed to properly supercharge growth in the UK is the construction sector to get going. In terms of employment multipliers, and GDP amplifiers, nothing beats a building boom.
"We’re definitely not there yet – with private commercial new work falling sharply. The good thing about construction is that it isn’t about tariffs – so it’s in the governments gift to get it going. The bad news is that it hasn’t happened yet."
For his tuppence-worth, George Lagarias, chief economist at Forvis Mazars, says: "The UK economy is, if nothing else, resilient.
"UK output slowed in March, but less than anticipated, mostly on improved services momentum."
While there were positive surprises, "we should not take comfort in the data, or any other data for that matter at the current juncture", he says.
"The American trade war is causing global macroeconomic volatility, so in the next few months we will likely see data behaving in unpredictable ways.
"This will be especially challenging for data-dependent policymakers, like the Bank of England. Ultimately, Mr Bailey and the rest of the committee might find themselves having to make big decisions with less data and more with economic intuition, exacerbating the risk of policy errors."
8.39am: 3i and Sage lead the fallers - profit taking?
3i’s decline is likely to mostly be profit-taking, as its shares hit all-time highs this month.
The total dividend of 73p per share is up from 61p a year ago, with a second dividend of 42.5p to be paid in July, subject to shareholder approval, while total return was £5.05 billion, or 25% on opening shareholders’ funds, and NAV per share rose to 2,542p at the end of March, from 2,085p a year ago.
Sage shares also are not far from all-time highs, though that peak was reached earlier in the year.
Analyst Harvey Robinson at Panmure Liberum said underlying revenue was in line with consensus and operating profits up 16.5% to £288 million beat the average City forecast of £281 million.
Sage also increased and extended its share buyback to £400 million, up from £200 million.
"Against the background of a more volatile and uncertain macroeconomic environment, Sage currently continues to expect organic total revenue growth in FY25 to be 9% or above. Operating margins are expected to trend upwards in FY25 and beyond," he says.
"There is clearly a bit more headroom in the guidance now, particularly on margins. They had guided to margin expansion of 50-100bp in FY25E (much of the questioning on the call in November focused on this point), and so far they are 140bp better this time."
8.15am: FTSE 100 plunges at open
The FTSE 100 has dropped over 44 points or 0.5% to 8,540.6 in opening trades.
3i Group PLC (LSE:III) is the biggest faller, down 6.7% after reporting results.
The Sage Group PLC (LSE:LON:SGE) is next, down 4.5% after its interim results. More on both those results shortly.
Next (LON:NXT) comes a group of companies whose shares have gone ex-dividend, led by BP, Shell and Unilever (LON:ULVR), three of the Footsie’s top 10.
In total, the ex-divs are creating a 21.7-point deficit on their own: Shell ($0.358 dividend = 6.61 points), Unilever (3.95 points), BP (3.95), GSK (LON:GSK) (2.70), Tesco (LON:TSCO) (2.61), Admiral Group (LON:ADML) (1.25), Coca-Cola (NYSE:KO) Europacific Partners (0.57), Pershing Square (LON:PSHP) Holdings (0.09).
7.55am: ITV warning
ITV PLC (LSE:ITV) has warned that a sharp drop in second-quarter advertising revenue is coming.
The broadcaster and television producer reported a 4% rise in group revenue for the first quarter, as growth from Studios offset a decline in advertising revenue.
Total external revenue came in at £756 million for the first three months of 2025, up from £727 million a year earlier, as ITV Studios revenue rose 1% at £386 million but Media & Entertainment revenue declined 3% to £489 million as total ad revenue fell 2%, as previously guided.
For the second quarter ITV now expects total ad revenue to plunge around 14%, worse than the 11% that UBS analysts thought would already shock the market. This will result in first-half ad sales falling around 8%.
7.34am: Aviva results in line with expectations
In company news, Aviva PLC (LSE:AV.) has reported a strong start to the year, with growth across its business lines that has reinforced confidence in achieving its targets for this and next year.
Chief executive Amanda Blanc said the acquisition of Direct Line (LON:DLGD) is "firmly on track", though the UK Competition and Markets Authority launched an investigation yesterday.
With Direct Line shareholders having voted in favour of the transaction, Blanc said she expects to complete the deal in the middle of the year.
The FTSE 100 insurance giant posted a 9% increase in general insurance premiums, while the Wealth business recorded £2.3 billion in net flows, equivalent to 5% of opening assets under management, and Retirement sales climbed 4% to £1.8 billion.
7.19am: UK trade balance
The UK’s underlying trade deficit narrowed £3.6bn to a deficit of £6.6bn in the first quarter, covering trade in goods and services.
The trade in goods deficit narrowed by £4.3 billion to £55.2 billion, while the trade in services surplus is estimated to have narrowed by around £0.7 billion to £48.6 billion.
The trade balance in March lessened to a £19.9 billion deficit from £21 billion in February.
Non-EU trade in March saw £6.8 billion deficit, down from £8.85 billion the month before, with exports of goods to the US increasing for the fourth consecutive month - just as Donald Trump was making his initial tariff announcements.
There was a £2.4 billion rise in the first quarter of exports across the Atlantic, while imports of goods from the United States rose by £1.3 billion.
7.12am: FTSE 100 decline to deepen, despite better GDP
The FTSE 100’s winning seems a long time ago now, as the index was called lower again on Thursday, shrugging off the breaking news that UK economic growth was stronger than expected in March.
A drop of 8 points is the indication from the futures market, after a decline of almost 18 points to 8,585 the day before.
Overnight, the main US stock indices were mixed, with the Nasdaq rising 0.7%, the S&P 500 up 0.1% and the Dow Jones down 0.2%.
Asian markets are mostly in red this morning, led by a 1% fall for the Nikkei and 0.9% for the Hang Seng.
Fresh data from the Office for National Statistics this morning has revealed that UK gross domestic product grew 0.2% month-on-month in March, when a flat month had been forecast after 0.5% growth in February.
It meant that UK GDP grew 0.7% in the first quarter compared to the final three months of last year, ahead of the 0.6% expected and up from 0.1%.
Year-on-year GDP in Q1 was up 1.3%, better than the 1.2% consensus estimate but slowing from the previous 1.5%.
5am: What to watch on Thursday 15 May
The first-quarter ITV PLC (LSE:ITV) could be dramatic, with the outlook for advertising revenue this year likely to be slashed, some analysts have warned.
Aviva PLC (LSE:AV.) shares are up over 20% so far this year but hold attractive potential, some reckon, due to its diversified sources of earnings and the Direct Line acquisition, which was called in for a competition investigation yesterday.
There will also be final results for National Grid PLC (LSE:NG.), where shares might be running out of steam after their own strong run, with these numbers one of the last for CEO John Pettigrew.
Another utility in the diary is United Utilities Group PLC (OTC:UUGRY) (LSE:UU.), where a sector that was a longtime haven for cautious investors is seen as possibly coming to an end.
Announcements due:
Trading updates: Aviva, ITV, Lion Finance Group, Premier Foods (LON:PFD), Watches of Switzerland
Interims: Auction Technology Group (LON:ATG), Grainger, Nexus Infrastructure, Sage
Finals: 3i Group, National Grid, United Utilities
Overseas earnings: Alibaba (NYSE:BABA), Applied Materials (NASDAQ:AMAT), Birkenstock (NYSE:BIRK), Deere, Deutsche Telekom (ETR:DTEGn), Siemens (ETR:SIEGn), Allianz (ETR:ALVG), Merck (NSE:PROR), RWE (LON:0HA0), Take Two Interactive, Vallourec (EPA:VLLP), Wal-Mart (NYSE:WMT)
AGMs: Alpha Group International, Bridgepoint Group, Capricorn Energy (LON:CNE), Central Asia Metals, Ceres Power (LON:CWR) Holdings, Computacenter (LON:CCC), Eurocell, Funding Circle, Global Opportunities Trust, Greencoat Renewables, Hammerson (LON:HMSO), Helios Towers, Hiscox (LON:HSX), Inchcape (LON:INCH), Kromek (LON:KMK) Group, Literacy Capital, Lloyds Banking Group (LON:LLOY), M&C Saatchi, Michelmersh Brick Holdings, Next, Regional REIT, Resolute Mining (ASX:RSG), Secure Trust Bank, Spirent Communications (LON:SPT), The Renewables Infrastructure Group, Unilever, Unite Group (LON:UTG)
Economic announcements: Balance of trade (UK), GDP (UK), Index of Services (UK), Industrial Production (UK), GDP (EU), Retail Sales (US), NAHB Housebuilding (US), Industrial Production (US), Initial Jobless Claims (US)