London close: Stocks mixed as UK inflation cools
By Josh White
Date: Wednesday 16 Apr 2025
(Sharecast News) - London stocks finished in a mixed state on Wednesday, recovering from earlier losses after a better-than-expected UK inflation report and robust US retail sales data.
The FTSE 100 index gained 0.32% to close at 8,275.60 points, while the FTSE 250 dipped marginally, by 0.01%, to 19,265.81 points.
In currency markets, sterling edged up 0.05% on the dollar to trade at $1.3238, but fell 0.74% against the euro, changing hands at €1.1641.
"Bullish sentiment continues to abound in gold though, which shows no sign of slowing down," said IG chief market analyst Chris Beauchamp.
"It might be the 'most crowded trade' according to Bank of America's latest survey, but so was 'Long Tech' for months at a time, and that didn't stop investors from piling in.
"All this comes as inflation remains muted for now."
Beauchamp said it was the level of uncertainty in the current macro outlook that was making gold so compelling.
"Investors seem to spend their days wondering when the next tariff headline will drop.
"Memories of last week's manic volatility are still fresh, so while European markets have continued their recovery from the recent low, the gains feel fragile at best.
"A different situation applies in the US, where the ban on Nvidia's export of H20 chips to China continues to cast a pall over sentiment."
UK inflation eases more than expected, US retail sales surge
In economic news, UK inflation eased more than expected in March, rising 2.6% year-on-year, down from 2.8% in February and below the forecast of 2.7%.
According to the Office for National Statistics, lower prices for recreational goods and motor fuels helped drive the decline, although clothing costs exerted upward pressure.
Core inflation, which strips out volatile items such as food and energy, dipped slightly to 3.4% from 3.5%, reinforcing expectations that price pressures may be gradually cooling.
"Inflation eased again in March, driven by a variety of factors including falling fuel prices and unchanged food costs compared with the price rises we saw this time last year," said ONS chief economist Grant Fitzner.
"The only significant offset came from the price of clothes, which rose strongly this month, following the unusual decrease in February."
Inflation also moderated on the continent, with Eurostat reporting that headline consumer prices in the eurozone rose 2.2% annually in March, down from 2.3% in the prior month.
The monthly increase was 0.6%, driven largely by a sharp rise in prices for non-energy industrial goods.
Falling energy prices helped ease the overall pace of gains, while services and food saw smaller increases.
Core inflation remained steady at 2.4%, in line with forecasts.
Across the Atlantic, US retail sales surged 1.4% in March, surpassing expectations as consumers accelerated purchases ahead of possible new import tariffs.
Sales growth was broad-based, led by a 5.3% jump in vehicle-related spending and solid gains in building materials, restaurants, and hobby goods.
Even after stripping out autos and fuel, retail sales still rose 0.8%, highlighting resilient consumer demand.
"The report suggests that while we are likely to avoid a negative first quarter GDP print, it will only just scrape above zero and the potential rebound in the second quarter is unlikely to be huge given tariffs are soon going to be noticed at a time when consumer confidence is under pressure on three fronts," said James Knightley at ING.
"One: anticipation of squeezed spending power after tariffs push up prices; two: worries about a weakening jobs market amidst government spending cuts; and three: declining wealth after the sell-off in equity and bond markets."
In China, the economy maintained strong momentum in the first quarter, defying forecasts of a slowdown.
GDP grew 5.4% year-on-year, above the 5.1% consensus.
March data showed notable strength in industrial production, which expanded 7.7%, and retail sales, which climbed 5.9%, both beating expectations.
Fixed asset investment also accelerated slightly, suggesting broad-based support for growth despite looming external risks from US trade policy.
Bunzl slides on guidance cut, precious metal miners in the green
On London's equity markets, Bunzl plunged 25.73% after the distribution and services group cut its 2025 guidance.
The company cited a weaker-than-expected start to the year, with first-quarter profits down significantly due to ongoing economic challenges.
It said it now expected only a moderate revenue increase at constant exchange rates, downgrading from earlier forecasts of robust growth.
The operating margin was also expected to fall to 8.0% from 8.3% in 2024.
Elsewhere, WH Smith slipped 0.95% after reporting mixed first-half results.
While profits in its travel division rose, the high street business posted a decline ahead of its planned sale to private equity firm Modella Capital.
XPS Pensions Group dropped 2.93% despite confirming it remains on track to meet upgraded full-year expectations.
On the upside, Barratt Redrow rose 2.41% after reaffirming its annual guidance.
The housebuilder completed 3,717 homes in the quarter to 30 March and saw a modest increase in private reservation rates.
Oxford Instruments surged 7.74% following confirmation of a strong full-year performance in line with expectations.
Mitie Group climbed 7.38% after upgrading its full-year profit forecast and announcing a £125m share buyback.
Precious metals miners also gained as gold prices hit new highs amid global trade tensions.
Fresnillo advanced 2.4%, while Endeavour Mining and Hochschild Mining rose 6.43% and 5.53%, respectively.
Electronic components specialist DiscoverIE Group added 3.51% after stating it expects to report record underlying profits and earnings for the year to 31 March, slightly ahead of earlier board expectations.
Reporting by Josh White for Sharecast.com.
Market Movers
FTSE 100 (UKX) 8,275.60 0.32%
FTSE 250 (MCX) 19,265.81 -0.01%
techMARK (TASX) 4,423.84 -0.14%
FTSE 100 - Risers
Shell (SHEL) 2,438.00p 2.66%
Associated British Foods (ABF) 2,159.00p 2.61%
Barratt Redrow (BTRW) 437.70p 2.55%
Admiral Group (ADM) 3,258.00p 2.45%
Persimmon (PSN) 1,197.50p 2.30%
Fresnillo (FRES) 1,081.00p 2.17%
Land Securities Group (LAND) 566.00p 2.17%
BP (BP.) 354.25p 2.16%
National Grid (NG.) 1,075.00p 2.09%
Diageo (DGE) 2,077.00p 2.06%
FTSE 100 - Fallers
Bunzl (BNZL) 2,290.00p -25.60%
Diploma (DPLM) 3,824.00p -3.43%
Intermediate Capital Group (ICG) 1,756.00p -3.30%
Informa (INF) 695.40p -3.30%
Melrose Industries (MRO) 418.50p -3.05%
JD Sports Fashion (JD.) 73.32p -2.69%
WPP (WPP) 543.60p -1.66%
InterContinental Hotels Group (IHG) 7,616.00p -1.60%
IMI (IMI) 1,707.00p -1.56%
Pershing Square Holdings Ltd NPV (PSH) 3,344.00p -1.55%
FTSE 250 - Risers
Oxford Instruments (OXIG) 1,754.00p 7.74%
Mitie Group (MTO) 130.40p 7.38%
Endeavour Mining (EDV) 2,174.00p 6.43%
Hochschild Mining (HOC) 320.40p 5.67%
ITV (ITV) 76.55p 4.29%
Discoverie Group (DSCV) 558.00p 3.51%
Empiric Student Property (ESP) 89.20p 2.76%
Derwent London (DLN) 1,939.00p 2.76%
Patria Private Equity Trust (PPET) 558.00p 2.74%
British Land Company (BLND) 376.00p 2.62%
FTSE 250 - Fallers
Oxford Nanopore Technologies (ONT) 117.60p -5.84%
Ocado Group (OCDO) 299.00p -4.84%
Genus (GNS) 1,650.00p -4.42%
Bridgepoint Group (Reg S) (BPT) 254.80p -4.35%
RS Group (RS1) 500.50p -3.94%
4Imprint Group (FOUR) 3,060.00p -3.79%
W.A.G Payment Solutions (WPS) 62.80p -3.67%
Renishaw (RSW) 2,215.00p -3.28%
THG (THG) 28.50p -3.26%
Genuit Group (GEN) 353.00p -3.03%
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