LONDON (ShareCast) - (Sharecast News) - London's equity markets advanced on Wednesday, buoyed by renewed optimism over potential US-China trade negotiations and a rebound in commodity prices.
The FTSE 100 index rose 0.9% to close at 8,403.18, while the FTSE 250 outperformed with a 1.27% gain, ending at 19,483.05.​

In currency markets, sterling was last down 0.06% on the dollar to trade at $1.3289, while it gained 0.03% against the euro, changing hands at €1.1693.

"Global stock indices regained all of Monday's losses and rallied strongly as US president Trump assuaged investors' concerns about the Fed's independence by no longer wishing to fire its xhair Jerome Powell," said IG senior technical analyst Axel Rudolph.

"Hopes of a potential de-escalation in the US-China trade war and better-than-expected earnings by the likes of Tesla and Boeing also helped improve sentiment.

"The economic backdrop remains less than rosy, though, with UK public borrowing costs coming in above forecasts, the German private sector falling back into contraction and euro area economic activity nearly stagnating.

"The US dollar recovered from its 3-year low while the price of crude oil and particularly gold dropped sharply amid profit-taking.

"Interestingly enough, the price of silver rose significantly as the gold/silver spread swiftly came off this week' 5-year high.

Public sector borrowing tops expectations in March

In economic news, public sector net borrowing rose to £16.4bn last month, higher than economists had forecast and the third-highest March total since records began in 1993.

The increase, from £13.6bn a year earlier and £12.3bn in February, came as spending continued to outpace revenues.

Over the financial year to March, borrowing totaled £151.9bn - £20.7bn more than the previous year and significantly above the £137.3bn forecast by the Office for Budget Responsibility.

That figure represented 5.3% of GDP, up from 4.8% last year, and marks the eighth largest annual deficit since the global financial crisis.

At the same time, survey data from S&P Global indicated a marked slowdown in UK private sector activity in April.

The composite purchasing managers' index fell to 48.2, the first sub-50 reading - signalling contraction - since October 2023.

Both manufacturing and services weakened, with the services PMI dropping to a 27-month low of 48.9, and the manufacturing gauge declining to 44.0, the lowest since mid-2023.

Weaker global demand was cited as a key factor, with export orders falling at the fastest rate since May 2020.

Business confidence also deteriorated, reaching its lowest point in 18 months amid rising concerns about trade disruption linked to US tariffs.

In the euro area, economic momentum continued to cool.

The Hamburg Commercial Bank's eurozone composite output index fell to 50.1 in April from 50.9, narrowly avoiding contraction.

While services activity dipped into negative territory, manufacturing posted a surprise uptick, with the output index climbing to 51.2, supported in part by stronger demand in select sectors.

Economists noted that increased public investment, particularly in infrastructure and defence, may help cushion the services sector over time.

Across the Atlantic, signs of stress in the US housing market emerged as mortgage applications tumbled.

The Mortgage Bankers Association reported a 12.7% decline in the week ending 18 April, the steepest weekly fall since October last year.

Refinancing applications dropped by 20%, while purchase activity slid 7%, reflecting the impact of rising mortgage rates.

Analysts attributed the move to a selloff in long-term Treasuries triggered by heightened trade tensions between the US and its key trading partners.

Croda, mining giants surge; Reckitt in the red

On London's equity markets, shares in Croda International surged after the specialty chemicals group posted an 8% rise in first-quarter sales and reaffirmed its full-year profit guidance.

The company cited resilience from its localised supply strategy in the face of rising geopolitical uncertainty and global trade tariffs.

Management said they were prepared to introduce a tariff surcharge if necessary.

Energy giant BP rose after activist investor Elliott Management disclosed a stake exceeding 5% in the company.

The hedge fund is reportedly urging the board to accelerate cost-cutting efforts and enhance free cash flow generation.

Mining stocks rebounded sharply as broader market sentiment improved.

Glencore, Anglo American and Antofagasta all jumped, benefiting from investor rotation back into cyclical sectors.

The rally excluded precious metals miners, which fell amid a retreat in gold prices from recent record highs.

Fresnillo dropped after reporting a sharp quarterly decline in metal output, with silver production down 10% and gold output off 24%.

Hochschild Mining tumbled following news that its Brazilian operations had been disrupted by severe weather in April.

Financials also posted solid gains after recent underperformance.

HSBC led the pack, while Standard Chartered and Barclays also advanced, as easing trade tensions supported risk sentiment in the sector.

In contrast, consumer goods group Reckitt Benckiser declined.

Despite maintaining full-year targets and reporting a 3.1% rise in like-for-like net revenue in its core business, the market was unimpressed with the pace of growth in the latest trading update.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,403.18 0.90%
FTSE 250 (MCX) 19,483.05 1.27%
techMARK (TASX) 4,422.05 0.86%

FTSE 100 - Risers

Croda International (CRDA) 2,947.00p 8.19%
Antofagasta (ANTO) 1,675.50p 7.03%
CRH (CDI) (CRH) 6,712.00p 6.64%
Standard Chartered (STAN) 1,087.50p 6.36%
HSBC Holdings (HSBA) 845.20p 5.61%
Babcock International Group (BAB) 789.00p 5.41%
Barclays (BARC) 293.75p 4.91%
International Consolidated Airlines Group SA (CDI) (IAG) 264.30p 4.55%
Flutter Entertainment (DI) (FLTR) 17,525.00p 4.10%
IMI (IMI) 1,739.00p 4.07%

FTSE 100 - Fallers

Reckitt Benckiser Group (RKT) 4,668.00p -5.70%
Fresnillo (FRES) 985.00p -5.20%
Severn Trent (SVT) 2,682.00p -2.86%
Vodafone Group (VOD) 70.24p -2.71%
Next (NXT) 11,840.00p -2.39%
Marks & Spencer Group (MKS) 399.90p -2.34%
National Grid (NG.) 1,068.00p -2.29%
SSE (SSE) 1,598.00p -2.26%
BAE Systems (BA.) 1,667.00p -2.26%
Coca-Cola Europacific Partners (DI) (CCEP) 6,690.00p -1.62%

FTSE 250 - Risers

Ferrexpo (FXPO) 54.30p 10.14%
Carnival (CCL) 1,282.50p 6.88%
Discoverie Group (DSCV) 553.00p 6.35%
Allianz Technology Trust (ATT) 340.00p 5.59%
Indivior (INDV) 695.00p 5.30%
Polar Capital Technology Trust (PCT) 280.00p 5.07%
Mobico Group (MCG) 59.60p 4.65%
4Imprint Group (FOUR) 3,195.00p 4.41%
Fidelity China Special Situations (FCSS) 237.50p 4.40%
Aston Martin Lagonda Global Holdings (AML) 66.20p 4.25%

FTSE 250 - Fallers

Hochschild Mining (HOC) 275.80p -9.57%
Endeavour Mining (EDV) 2,038.00p -5.65%
Ithaca Energy (ITH) 130.40p -3.55%
Harbour Energy (HBR) 157.00p -2.61%
Pennon Group (PNN) 484.80p -2.42%
Foresight Solar Fund Limited (FSFL) 80.30p -1.95%
Dunelm Group (DNLM) 1,065.00p -1.93%
Supermarket Income Reit (SUPR) 77.30p -1.90%
THG (THG) 28.68p -1.24%
Helios Towers (HTWS) 106.40p -1.12%

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