London close: Stocks finish higher as US economy contracts
By Josh White
Date: Wednesday 30 Apr 2025
(Sharecast News) - London stocks extended their gains on Wednesday, after fresh data from the US showed a slowing in consumer price growth, alongside the country's first economic contraction since 2022.
The FTSE 100 rose 0.37% to close at 8,494.85, marking its longest winning streak in more than eight years, while the FTSE 250 advanced 0.38% to finish at 19,884.59.
In currency markets, sterling was last down 0.48% on the dollar to trade at $1.3344, as it slipped 0.18% against the euro, changing hands at €1.1754.
"Markets had been rubbing along relatively happily until today's US data, which seemed to give form to investors' worst nightmares," said IG chief market analyst Chris Beauchamp.
"Negative GDP, a first in three years, weaker jobs growth and higher wages are the potent combination of stagflation.
"Inevitably, the market has ignored the fact that the import side of things drove the decline in growth, and given the huge rebound in stocks some volatility at month-end was not surprising."
Beauchamp said it was now "up to tech earnings" to provide some cheer to finish up April.
"A month like April, where stocks take a nasty tumble but then claw their way back again, is a rare occurrence.
"But when it does happen, it has often formed the low in the selloff - 2008 is the exception, but then again when isn't 2008 the exception.
"Yesterday's consumer confidence showed how panicked Americans are, which at least provides hope that data in May and June might assuage some of their worst fears."
US economy contracts for first time in three years
In economic news, the US economy contracted at an annualised rate of 0.3% in the first quarter, according to preliminary data, reversing the 2.4% expansion seen in the final quarter of 2024.
The decline was driven largely by a sharp rise in imports, as firms and consumers rushed to beat new tariffs announced in early April.
It brought the US close to a technical recession and diverged sharply from expectations for modest growth.
US inflation meanwhile showed signs of easing, with the personal consumption expenditures (PCE) price index rising 2.3% year-on-year in March, down from February's 2.7%.
Core PCE, which excludes food and energy, also slowed to 2.6%.
Both measures were flat on the month.
The softer inflation data could give the Federal Reserve more flexibility on interest rates, particularly as growth slows.
On home shores, UK house prices fell more sharply than expected in April, as recent changes to stamp duty thresholds weighed on the market.
Nationwide reported a 0.6% monthly decline in its closely watched house price index, compared to flat growth in March and analyst forecasts for no change.
Annual price growth also slowed to 3.4% from 3.9%, falling short of the 4.1% consensus.
The lender attributed the slowdown to buyers adjusting to the updated stamp duty regime introduced at the start of the month.
"The softening in house price growth was to be expected, given the changes to stamp duty," said Robert Gardner, Nationwide's chief economist.
"Early indications suggest there was a significant jump in transactions in March, with buyers bringing forward their purchases to avoid additional tax obligations."
In contrast, UK supermarket sales surged in April, driven by a late Easter and favourable weather.
Data from NielsenIQ showed total till sales rose 9.6% in the four weeks to 19 April, a sharp increase from 2.7% in March.
Confectionery, snacks and soft drinks led the gains with a 19.3% jump, while fresh food sales climbed 11.6%.
In-store sales outpaced online, rising 9.4% versus 6.3%.
Among retailers, Marks & Spencer led with a 14.7% sales increase, while Ocado gained 18.3%.
Aldi and Lidl continued to grow strongly, up 7% and 11.2% respectively.
Tesco and Sainsbury's also posted solid gains, while Asda lost ground with a 3.5% drop in sales.
In the eurozone, economic growth outpaced expectations in the first quarter of 2025, according to Eurostat.
GDP rose 0.4% over the period, up from 0.2% in the previous quarter and ahead of forecasts.
Germany and France both returned to modest growth, avoiding a technical recession.
Finally on data, factory activity in China weakened in April as the effects of escalating trade tensions with the US began to emerge.
The official manufacturing PMI fell to 49.0, its lowest level in 16 months and below forecasts.
The Caixin private-sector PMI also declined but remained slightly in expansion at 50.4.
Non-manufacturing activity also softened, with the services PMI easing to 50.4.
Smith & Nephew jumps on first-quarter growth, miners in the red
On London's equity markets, Smith & Nephew climbed 5.81% after the medical devices group reported a 1.6% rise in first-quarter revenues to $1.41bn, or 3.1% on a constant currency basis, and reaffirmed its full-year guidance.
GSK also advanced, gaining 3.53% after delivering 4% constant currency sales growth to £7.52bn in the first quarter and maintaining its outlook despite potential trade disruptions.
Coca-Cola HBC added 3.8% as the bottling company posted stronger-than-expected organic revenue growth, buoyed by robust demand in emerging markets.
Animal genetics firm Genus soared 16.18% after receiving US FDA approval for its PRRS-resistant gene-edited pigs, clearing the way for use in the US food supply chain.
Barclays reversed earlier losses to end 0.23% higher, despite a rise in bad loan provisions to £643m, driven by US economic uncertainty and the impact of its Tesco Bank acquisition.
On the downside, Glencore tumbled 7.62% following a sharp drop in copper production during the first quarter, although gains in cobalt and coal output provided some offset.
Other miners followed lower, with Anglo American falling 5.05%, Antofagasta down 3.88%, and Rio Tinto losing 2.51%.
Banking stocks also retreated - HSBC slid 3.53%, NatWest dropped 1.69%, and Lloyds eased 0.33% amid sector-wide weakness.
Housebuilder Taylor Wimpey slipped 0.97% despite reporting solid spring trading.
While private sales per outlet improved year-on-year, the company noted a rise in cancellation rates to 16%, up from 13%.
Reporting by Josh White for Sharecast.com.
Market Movers
FTSE 100 (UKX) 8,494.85 0.37%
FTSE 250 (MCX) 19,884.59 0.38%
techMARK (TASX) 4,577.72 1.37%
FTSE 100 - Risers
Smith & Nephew (SN.) 1,054.00p 5.82%
Coca-Cola HBC AG (CDI) (CCH) 3,900.00p 3.89%
GSK (GSK) 1,483.50p 3.60%
Pearson (PSON) 1,196.50p 3.59%
SSE (SSE) 1,692.00p 2.92%
British American Tobacco (BATS) 3,248.00p 2.92%
Compass Group (CPG) 2,518.00p 2.78%
Airtel Africa (AAF) 171.50p 2.57%
Coca-Cola Europacific Partners (DI) (CCEP) 6,730.00p 2.44%
Smiths Group (SMIN) 1,864.00p 2.42%
FTSE 100 - Fallers
Glencore (GLEN) 244.40p -7.39%
Anglo American (AAL) 2,029.00p -4.63%
Antofagasta (ANTO) 1,633.00p -3.60%
HSBC Holdings (HSBA) 832.00p -2.76%
JD Sports Fashion (JD.) 78.58p -2.68%
Rio Tinto (RIO) 4,447.00p -2.19%
Croda International (CRDA) 2,951.00p -2.03%
Standard Chartered (STAN) 1,076.00p -1.82%
Entain (ENT) 637.60p -1.73%
Prudential (PRU) 791.80p -1.52%
FTSE 250 - Risers
Genus (GNS) 1,842.00p 16.14%
Senior (SNR) 138.60p 3.90%
SSP Group (SSPG) 148.00p 3.28%
Safestore Holdings (SAFE) 629.50p 2.86%
Shaftesbury Capital (SHC) 135.80p 2.72%
Ninety One (N91) 148.90p 2.69%
Vesuvius (VSVS) 342.20p 2.58%
Drax Group (DRX) 617.00p 2.58%
Raspberry PI Holdings (RPI) 438.20p 2.51%
Marshalls (MSLH) 281.00p 2.37%
FTSE 250 - Fallers
PPHE Hotel Group Ltd (PPH) 1,248.00p -6.17%
IP Group (IPO) 42.20p -3.65%
Aston Martin Lagonda Global Holdings (AML) 67.35p -3.65%
Bluefield Solar Income Fund Limited (BSIF) 96.90p -3.10%
Syncona Limited NPV (SYNC) 90.50p -2.90%
Mobico Group (MCG) 31.10p -2.69%
Wizz Air Holdings (WIZZ) 1,626.00p -2.58%
THG (THG) 24.60p -2.54%
Dr. Martens (DOCS) 54.65p -2.40%
BH Macro Ltd. GBP Shares (BHMG) 391.50p -2.37%
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