Source: Sharecast
The FTSE 100 index rose 0.61% to finish at 8,634.80 points, while the FTSE 250 advanced 0.59% to 19,590.86 points.
In currency markets, sterling was last up 0.03% on the dollar to trade at $1.2922, as it gained 0.13% against the euro, changing hands at €1.1959.
“Contraction in the US manufacturing sector in March and job openings below forecasts provoked a sell-off in US stock indices and saw the 10-year Treasury yield fall to a near five-month low amid Fed rate cut expectations as the US economy cools,” said IG senior technical analyst Axel Rudolph.
“Eurozone inflation slowing to a four-month low has kept the continent's stock indices in positive territory.”
Rudolph noted that the gold price hit a new record high for a fourth consecutive day, and was on track for its fifth straight week of gains amid flight-to-safety inflows, with the precious metal nearly hitting the $3,150 per troy ounce mark.
“The crude oil price extended its gains to $72 per barrel amid US tariff threats on Russian and Iranian oil in anticipation of 'Liberation Day’.”
UK manufacturing activity deteriorates further
In economic news, UK manufacturing activity deteriorated further in March, with output and new orders falling sharply amid rising costs and heightened trade uncertainty.
The latest S&P Global purchasing managers’ index fell to 44.9, its lowest since October 2023 and well below the 50 threshold that separates growth from contraction.
The decline, which was broad-based across all manufacturing categories and company sizes, reflected the fastest drop in new orders in 19 months and the steepest fall in production since last autumn.
Business sentiment also weakened to its lowest point in nearly two and a half years, with firms citing geopolitical instability, subdued client demand, and broader economic slowdown at home and abroad.
“Companies are being hit on several fronts - many reported that domestic market conditions are deteriorating, costs are rising due to changes in the national minimum wage and national insurance contributions, geopolitical tensions are intensifying, and global trade faces potential disruptions from tariffs,” said Rob Dobson, director at S&P Global Market Intelligence.
“Although the impact on production volumes was widespread across industry, it was again small manufacturers that took the hardest knock.
“The outlook is also darkening, with overall business optimism plunging to its lowest levels since late-2022.”
Elsewhere, retail price data offered mixed signals.
According to the British Retail Consortium, UK shop prices edged down 0.2% in March, reversing a 0.4% increase the previous month.
Food inflation picked up slightly to 2.4% year-on-year, but non-food prices remained in deflation.
Compared with a year earlier, overall prices were down 0.4%, suggesting that while retailers had held off on price hikes, underlying cost pressures continue to build.
Mike Watkins, head of retail and business insight at NielsenIQ, said increased competition and seasonal promotions were the reason for the overall drop in prices last month, as retailers compete to lure in “reluctant shoppers”.
“With upwards pressure on prices, retailers may also need some focussed price cuts to help footfall in the run up to the late Easter,” he said.
Housing market data meanwhile pointed to a plateau in prices.
Lender Nationwide reported that UK house prices were flat on the month in March, after a 0.4% rise in February.
On an annual basis, prices were 3.9% higher, matching February’s rate; the average house was valued at £271,316.
Nationwide warned that prices could soften slightly in coming months, partly due to recent changes in stamp duty.
“These price trends are unsurprising, given the end of the stamp duty holiday at the end of March - transactions associated with mortgage approvals made in March, especially toward the end of the month, would be unlikely to complete before the deadline,” said Robert Gardner, Nationwide's chief economist.
“Indeed, the market is likely to remain a little soft in the coming months since activity will have been brought forward to avoid the additional tax obligations - a pattern typically observed in the wake of the end of stamp duty holidays.
“Nevertheless, activity is likely to pick up steadily as the summer progresses, despite wider economic uncertainties in the global economy, since underlying conditions for potential home buyers in the UK remain supportive.”
In the eurozone, manufacturing showed tentative signs of recovery.
The final HCOB purchasing managers’ index (PMI) for March rose to 48.6, its highest level in over two years, while the output component moved into expansion at 50.5.
However, any sustained rebound remains uncertain as US trade policy looms over global markets.
US manufacturing contracted more than expected in March, with the ISM PMI falling to 49.0 from February’s 50.3.
The production and new orders indices both slipped into contraction, while the prices index surged to a 16-month high, reflecting mounting cost pressures.
The data marked an abrupt end to two months of tentative growth.
Adding to global uncertainty, the Trump administration was reportedly preparing a sweeping overhaul of US trade policy, considering tariffs of up to 20% on most imports.
According to the Washington Post, the plan could generate trillions in revenue and target key industries such as automobiles and pharmaceuticals.
While details remained undecided, the proposal could mark a dramatic shift in global trade dynamics.
Bank of England policymaker Megan Greene warned that while tariffs are typically inflationary, the UK could see a disinflationary effect if trade flows were redirected from the US.
She stressed that UK inflation remained stickier than expected, requiring continued caution from the central bank.
Inflation expectations had also risen modestly, which Greene said warranted close monitoring to keep long-term expectations anchored.
Meanwhile, the Reserve Bank of Australia held interest rates steady at 4.1% ahead of federal elections.
The central bank said inflation had eased substantially, but cautioned that new US tariffs could weigh on global confidence and delay spending decisions.
While no change was made at this meeting, markets were increasingly expecting a rate cut when the RBA next meets in May.
Greencore jumps on guidance upgrade, supermarkets in the red
On London’s equity markets, Greencore Group jumped 5.56% after the Irish convenience food manufacturer raised its full-year profit guidance.
The upgrade followed a strong second-quarter performance, boosting investor confidence in its outlook.
Spire Healthcare Group also advanced, rising 3.04% after announcing the £3.3m acquisition of Acorn Occupational Health.
The move was seen as a strategic step to expand its corporate health services offering.
Financial services firms AJ Bell and IntegraFin Holdings gained 1.29% and 0.82% respectively after Deutsche Bank upgraded both stocks to ‘buy’.
On the downside, supermarket shares retreated following weaker sector data.
J Sainsbury fell 1.96% and Tesco declined 1.63% after Kantar figures showed annual sales growth in the grocery sector slowed to 1.8% in March, the lowest rate in 10 months.
Sainsbury’s was further pressured by a downgrade to ‘neutral’ at BNP Paribas Exane.
Travis Perkins tumbled 8% after warning it had only broken even in 2024 due to weak volumes, falling prices, and a struggling merchanting division.
The group also flagged £139m in impairment charges, dragging on its bottom line.
Advertising firm WPP dropped 2.94% after Bank of America warned that its first-quarter results, due later this month, could show deteriorating revenue trends.
The broker suggested that without new client wins, a cut to guidance could follow if macroeconomic headwinds persist.
Reporting by Josh White for Sharecast.com.
Market Movers
FTSE 100 (UKX) 8,634.80 0.61%
FTSE 250 (MCX) 19,590.86 0.59%
techMARK (TASX) 4,630.50 0.50%
FTSE 100 - Risers
Rolls-Royce Holdings (RR.) 779.40p 4.06%
Hiscox Limited (DI) (HSX) 1,208.00p 2.72%
Rentokil Initial (RTO) 356.20p 2.47%
easyJet (EZJ) 452.40p 2.28%
JD Sports Fashion (JD.) 69.40p 2.21%
Barclays (BARC) 293.90p 2.12%
Halma (HLMA) 2,632.00p 1.98%
Babcock International Group (BAB) 738.00p 1.93%
Pershing Square Holdings Ltd NPV (PSH) 3,808.00p 1.93%
Fresnillo (FRES) 953.00p 1.82%
FTSE 100 - Fallers
WPP (WPP) 560.20p -3.61%
Sainsbury (J) (SBRY) 230.60p -1.96%
Informa (INF) 756.60p -1.79%
International Consolidated Airlines Group SA (CDI) (IAG) 257.40p -1.30%
St James's Place (STJ) 965.60p -1.17%
Vodafone Group (VOD) 72.20p -0.96%
Weir Group (WEIR) 2,298.00p -0.95%
Bunzl (BNZL) 2,940.00p -0.88%
SSE (SSE) 1,580.50p -0.85%
BP (BP.) 433.00p -0.71%
FTSE 250 - Risers
PPHE Hotel Group Ltd (PPH) 1,294.00p 8.95%
Auction Technology Group (ATG) 611.00p 5.16%
B&M European Value Retail S.A. (DI) (BME) 273.70p 5.11%
Elementis (ELM) 134.80p 4.17%
Hochschild Mining (HOC) 273.20p 3.97%
Caledonia Investments (CLDN) 3,675.00p 3.81%
Deliveroo Class (ROO) 122.80p 3.09%
Spire Healthcare Group (SPI) 182.80p 3.04%
Allianz Technology Trust (ATT) 361.00p 3.00%
QinetiQ Group (QQ.) 397.20p 2.85%
FTSE 250 - Fallers
Travis Perkins (TPK) 498.60p -10.18%
Crest Nicholson Holdings (CRST) 163.50p -3.65%
Petershill Partners (PHLL) 229.50p -3.37%
Wizz Air Holdings (WIZZ) 1,437.00p -3.04%
Close Brothers Group (CBG) 270.40p -2.80%
THG (THG) 31.70p -2.10%
Burberry Group (BRBY) 757.00p -1.92%
Telecom Plus (TEP) 1,708.00p -1.84%
Great Portland Estates (GPE) 292.50p -1.68%
Man Group (EMG) 194.80p -1.67%
