London close: Stocks finish higher on US trade optimism
By Josh White
Date: Friday 27 Jun 2025
(Sharecast News) - London stocks finished higher on Friday, lifted by renewed optimism over a potential US-China trade agreement as investors digested some fresh data from across the pond.
The FTSE 100 index rose 0.72% to close at 8,798.91 points, while the FTSE 250 gained 1.12%, ending the session at 21,715.96 points.
In currency markets, sterling was last down 0.04% on the dollar to trade at $1.3722 and fell 0.28% versus the euro to €1.1699.
"Trade noises are positive - the US and China have confirmed their London agreement on rare earth and tech, while the White House said Trump's trade deadlines in July could be extended," said Neil Wilson, UK investor strategist at Saxo Markets.
"Trump's July 9 deadlines for restarting tariffs are 'not critical', White House press secretary Karoline Leavitt said.
"That's one of the major risks for markets dealt with."
Wilson said the other risk related to the Fed, noting that some weak US data this week helped "nudge the needle" on when the market thinks the next cut is coming.
"US GDP was way lower than expected, as was inflation, boosting rate cut chances.
"In short, markets are ignoring the noise - looking ahead to rate cuts from the Fed, fiscal stimulus in Europe, deregulation for banks on Wall Street, lower inflation and trade deals - hardly the negative environment everyone has been shouting about."
US and China agree partial trade truce, US inflation remains above forecasts
At the top of the agenda on Friday was news that The United States and China moved closer to resolving their long-running trade dispute after agreeing on a framework aimed at implementing the Geneva truce agreed last month.
Beijing confirmed it would review and approve exports of critical materials, while Washington committed to lifting certain restrictions.
The White House said the agreement focussed on expediting rare earth shipments to the US.
US commerce secretary Howard Lutnick confirmed that once rare earth exports resume, US countermeasures would be withdrawn.
The dispute, sparked by steep tariffs introduced by Donald Trump, had severely disrupted global supply chains, particularly in high-tech and automotive sectors.
In the US, personal income and spending both declined unexpectedly in May, falling 0.4% and 0.1% respectively, against expectations for modest growth.
Inflation, however, remained slightly above forecasts, with the core personal consumption expenditures price index - the Federal Reserve's preferred gauge - rising 2.7% year-on-year.
The data also showed the personal savings rate dipped to 4.5%.
Despite weaker spending data, consumer confidence in the US improved in June.
The University of Michigan's index rose to 60.7 from 52.2 in May, although it remained well below late 2024 levels.
Inflation expectations eased considerably, with one-year expectations falling from 6.6% to 5.0%, though long-term concerns persist.
On home shores, UK car production fell to its lowest level for May since 1949, excluding the pandemic, as Trump's tariffs weighed heavily on exports.
Output dropped 32.8% year-on-year to 49,810 units, with US-bound shipments down 55%.
The Society of Motor Manufacturers and Traders cited tariffs, supply chain disruptions, and model changeovers as key factors.
However, the industry expressed cautious optimism following new trade agreements with the EU, India and the US, as well as the release of the UK's long-awaited industrial strategy.
"While 2025 has proved to be an incredibly challenging year for the UK automotive production, there is the beginning of some optimism for the future," said Mike Hawes, SMMT chief executive.
"Confirmed trade deals with crucial markets, especially the US, and a more positive relationship with the EU, as well as governments strategies on industry and trade ... should help recovery."
Across Europe, economic sentiment deteriorated further in June.
The eurozone's economic sentiment indicator fell to 94.0, near a four-year low, driven mainly by a decline in industry confidence.
Meanwhile, inflation in France unexpectedly accelerated to 0.9% from 0.7%, with price pressures rising in services, food, and transport as energy deflation eased.
JD Sports jumps on Nike readacross, gold miners in the red
On London's equity markets, JD Sports Fashion jumped 6.78% after Nike reported stronger-than-expected fourth-quarter revenues, boosting sentiment across the sports retail sector.
"While the commentary that Nike performance is 'not where we want it to be' is not surprising with 2025 revenue declining 10%, there is some encouragement from the fact that fourth quarter revenues were above consensus - $11.1bn versus consensus of $10.7bn - as was earnings per share -14 cents versus consensus of 13 cents," noted broker Shore Capital.
"While Nike clearly still has work to do, it appears the business is past the worst and so we do see the potential for the removal of what has been a significant headwind for JD."
Unilever rose 0.89% following a Financial Times report that it was acquiring men's grooming brand Dr Squatch for $1.5bn.
British Gas owner Centrica edged up 0.52% after the FT reported it would take a 15% stake in the Sizewell C nuclear project following lengthy negotiations.
Luxury stocks with significant exposure to China also rallied on news of the US-China trade truce.
Burberry gained 5.17% and Watches of Switzerland advanced 4.74%, as the easing of trade tensions buoyed investor sentiment.
On the downside, gold miners Fresnillo, Hochschild Mining and Endeavour Mining dropped as gold prices retreated.
Babcock International slipped 2.33% after Deutsche Bank downgraded the defence contractor to 'hold' from 'buy'.
Reporting by Josh White for Sharecast.com.
Market Movers
FTSE 100 (UKX) 8,798.91 0.72%
FTSE 250 (MCX) 21,715.96 1.12%
techMARK (TASX) 5,091.87 0.39%
FTSE 100 - Risers
JD Sports Fashion (JD.) 87.66p 7.56%
Ashtead Group (AHT) 4,732.00p 5.55%
Melrose Industries (MRO) 536.00p 3.59%
Flutter Entertainment (DI) (FLTR) 20,300.00p 3.47%
CRH (CDI) (CRH) 6,692.00p 3.18%
Standard Chartered (STAN) 1,219.00p 2.78%
IMI (IMI) 2,116.00p 2.42%
Barclays (BARC) 338.55p 2.22%
Rolls-Royce Holdings (RR.) 954.20p 2.18%
Taylor Wimpey (TW.) 122.40p 2.17%
FTSE 100 - Fallers
Fresnillo (FRES) 1,433.00p -4.21%
Babcock International Group (BAB) 1,137.00p -1.73%
BAE Systems (BA.) 1,862.00p -1.35%
Coca-Cola Europacific Partners (DI) (CCEP) 6,640.00p -1.04%
Halma (HLMA) 3,216.00p -0.99%
Admiral Group (ADM) 3,258.00p -0.97%
United Utilities Group (UU.) 1,141.50p -0.91%
Imperial Brands (IMB) 2,824.00p -0.70%
National Grid (NG.) 1,063.50p -0.70%
Prudential (PRU) 920.80p -0.69%
FTSE 250 - Risers
Burberry Group (BRBY) 1,150.00p 7.08%
Kier Group (KIE) 214.50p 6.98%
RHI Magnesita N.V. (DI) (RHIM) 2,960.00p 5.86%
Watches of Switzerland Group (WOSG) 415.60p 4.74%
Renishaw (RSW) 2,955.00p 4.60%
Coats Group (COA) 81.60p 4.49%
Investec (INVP) 538.00p 4.25%
Genus (GNS) 2,045.00p 4.02%
Foresight Group Holdings Limited NPV (FSG) 424.00p 3.92%
Carnival (CCL) 1,782.00p 3.91%
FTSE 250 - Fallers
Computacenter (CCC) 2,398.00p -6.62%
Endeavour Mining (EDV) 2,176.00p -4.23%
Chemring Group (CHG) 556.00p -3.64%
Hochschild Mining (HOC) 251.80p -2.55%
Softcat (SCT) 1,725.00p -2.27%
Indivior (INDV) 986.00p -2.18%
Ithaca Energy (ITH) 158.20p -1.86%
Kainos Group (KNOS) 733.50p -1.54%
HarbourVest Global Private Equity Limited A Shs (HVPE) 2,540.00p -1.17%
CMC Markets (CMCX) 253.50p -0.98%
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