London midday: Stocks maintain gains as US hints at tariff compromise
By Michele Maatouk
Date: Wednesday 05 Mar 2025
(Sharecast News) - London stocks were still in the black by midday on Wednesday amid hopes that US President Donald Trump might reach a tariff compromise with Canada and Mexico.
The FTSE 100 was up 0.4% at 8,796.37, having closed down 1.3% on Tuesday, when markets were rattled by trade war fears.
Sentiment got a boost after US Commerce Secretary Howard Lutnick said on Fox Business that the US might meet Canada and Mexico "in the middle" to "work something out" on tariffs.
Russ Mould, investment director at AJ Bell, said: "Investors are looking for any signs that Trump is open to deals rather than doling out tariffs and refusing to listen. US commerce secretary Howard Lutnick hinted we might soon see an amendment to the tariff structure that came into force this week.
"Markets would take even the slightest rollback from Trump as a positive sign, helping to settle nerves following concerns about a full-blown trade war."
The mood also lifted after Ukrainian President Volodymyr Zelensky said that his meeting with Trump last week was "regrettable" and that he was ready to negotiate peace.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "Expectations have risen that US relations with Ukraine are warming up from the ice-cold intensity of Friday's Oval Office meeting between Trump, Vance and Zelensky.
"Trump brandished a letter from the Ukrainian President, in his address to Congress, which he said indicated Kyiv was ready to come to the negotiating table. The renewed willingness from Zelensky to sign a minerals deal has led to hopes that a way can be found out of a diplomatic quagmire, which has eased some geopolitics fears."
On home shores, a survey out earlier showed that job cutting across the service sector accelerated in February, as firms reacted to subdued demand and rising costs.
According to the latest S&P Global UK services PMI survey, the reduction in employment was the fastest since November 2020.
Respondents attributed the reduction in employment to weak demand, with a lack of new business to replace completed projects, and sharply increasing input costs.
Around one-third of respondents said they had seen their average cost burdens rise in February, largely through increased salary payments and suppliers passing on higher payroll costs.
Overall, the business activity index rose fractionally, to 51.0 from 50.8 in January. The reading has now remained above the neutral 50.0 threshold for sixteen consecutive months.
However, it is also well below the long-run series average of 54.3 and was marginally below consensus expectations of 51.1.
The UK composite PMI - a weighted average of the manufacturing output and services business activity indices - was 50.5, down from 50.6 and in line with expectations. A reading above 50.0 indicates growth, while one below it suggests contraction.
Tim Moore, economics director at S&P Global Market Intelligence, said: "UK service providers achieved another modest increase in overall business activity during February.
"However, there has been a clear loss of growth momentum since last autumn, and the survey's forward-looking indicators continue to suggest an elevated risk of stagflation on the horizon.
"Worries about the near-term economic outlook and the impact of rising payroll costs contributed to another slide in optimism.
"Employment has now decreased for five months in a row. Aside from the pandemic, this represents the longest period of falling employment since early 2011."
In equity markets, Games Workshop surged to the top of the FTSE 100 as it lifted guidance for the full year, saying trading in January and February had been ahead of expectations, with strong trading across both the core business and licensing.
Barclays rose sharply after an upgrade to 'outperform' from 'neutral' by BNP Paribas Exane.
Breedon jumped as it hailed record underlying full-year results and announced the acquisition of US construction materials and surfacing solutions business Lionmark for $238m (£187m) - a deal which is expected to more than double its US revenue.
Wealth management outfit Quilter racked up strong gains as it lifted its full-year dividend by 13% after a strong end to 2024, as the company reported double-digit profit growth and a big increase in assets under management and administration.
Moonpig shot higher after an initiation at 'outperform' by RBC Capital Markets.
Balfour Beatty slumped as the infrastructure group said Leo Quinn will step down from the board later this year after more than 10 years as chief executive.
Market Movers
FTSE 100 (UKX) 8,796.37 0.43%
FTSE 250 (MCX) 20,243.81 1.47%
techMARK (TASX) 4,834.03 0.63%
FTSE 100 - Risers
Games Workshop Group (GAW) 14,620.00p 6.25%
Mondi (MNDI) 1,265.00p 5.73%
CRH (CDI) (CRH) 7,692.00p 5.43%
Antofagasta (ANTO) 1,800.50p 5.29%
Barclays (BARC) 305.35p 4.43%
Convatec Group (CTEC) 265.80p 4.40%
Fresnillo (FRES) 814.00p 4.36%
easyJet (EZJ) 498.60p 4.27%
Ashtead Group (AHT) 4,578.00p 3.95%
IMI (IMI) 2,042.00p 3.87%
FTSE 100 - Fallers
Severn Trent (SVT) 2,427.00p -3.38%
National Grid (NG.) 939.60p -3.33%
British American Tobacco (BATS) 3,062.00p -2.98%
Haleon (HLN) 404.10p -2.60%
United Utilities Group (UU.) 950.80p -2.60%
GSK (GSK) 1,478.50p -2.02%
BT Group (BT.A) 151.75p -2.00%
Imperial Brands (IMB) 2,768.00p -1.98%
SSE (SSE) 1,477.50p -1.86%
Unilever (ULVR) 4,532.00p -1.84%
FTSE 250 - Risers
Breedon Group (BREE) 496.50p 16.14%
Aston Martin Lagonda Global Holdings (AML) 83.00p 10.30%
Indivior (INDV) 787.00p 8.93%
Wizz Air Holdings (WIZZ) 1,583.00p 8.87%
Ibstock (IBST) 164.00p 7.61%
Quilter (QLT) 162.00p 7.28%
Ferrexpo (FXPO) 75.60p 6.93%
SThree (STEM) 255.50p 6.90%
Hays (HAS) 72.40p 6.47%
Inchcape (INCH) 727.50p 6.13%
FTSE 250 - Fallers
Balfour Beatty (BBY) 437.00p -4.08%
Tritax Big Box Reit (BBOX) 144.30p -2.24%
Oxford Nanopore Technologies (ONT) 89.65p -1.81%
Pennon Group (PNN) 401.20p -1.71%
Bakkavor Group (BAKK) 151.50p -1.62%
Hammerson (HMSO) 260.60p -1.59%
Drax Group (DRX) 588.00p -1.42%
Grainger (GRI) 203.00p -1.22%
Derwent London (DLN) 1,788.00p -0.94%
Target Healthcare Reit Ltd (THRL) 84.20p -0.94%
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