London close: Stocks higher on hopes of geopolitical easing
By Josh White
Date: Tuesday 19 Aug 2025
(Sharecast News) - London equities closed higher on Tuesday as investors weighed the possibility of progress towards ending the Ukraine war, after US president Donald Trump said he was arranging a meeting between his Ukrainian and Russian counterparts.
"Financial markets remained stable, with global stocks near all-time highs following Donald Trump's discussions with Ukraine's president and European officials, which concluded with a proposal for a summit with Russia," said Patrick Munnelly, market strategy partner at TickMill.
"European equity index futures rose as leaders from the US, Ukraine, Europe, and NATO expressed advancement in peace negotiations aimed at resolving the war in Ukraine."
The FTSE 100 index advanced 0.34% to 9,189.22 points, while the FTSE 250 added 0.38% to 21,833.26 points.
"The FTSE 100 dipped a little in early trading after selling on Wall Street and in Asia overnight," said AJ Bell head of financial analysis Danni Hewson.
"Markets seem to be exercising some caution ahead of the Jackson Hole meeting later this week and as talks over a peace agreement between Russia and Ukraine remain inconclusive."
Gains came despite subdued trading volumes during the summer period, with sentiment supported by hopes of a breakthrough in peace talks.
"Market sentiment was cautiously optimistic regarding the Ukraine peace talks after Trump encouraged Vladimir Putin to start planning a summit with Zelenskiy," Munnelly added.
In currency markets, sterling was little changed, slipping 0.04% against the dollar to $1.3499 and easing 0.06% versus the euro to €1.1574, as investors awaited further signals on the geopolitical front and from central banks later in the week.
"Investors are gearing up for a crucial week as the Federal Reserve's annual Economic Policy Symposium begins on Thursday in Jackson Hole, Wyoming, which could provide insights into future interest rate directions," Munnelly noted.
Hewson added that "earnings from Home Depot later today will be closely monitored as investors look for any indication of how the US consumer is faring."
UK grocery price inflation eases, S&P reaffirms US rating
In economic news, grocery price inflation in the UK eased slightly in August but remained well above normal levels, according to figures from market research firm Worldpanel.
Prices rose 5.0% in the four weeks to 10 August, down from 5.2% in July, while supermarket sales were 4.0% higher than a year earlier.
Fraser McKevitt, head of retail and consumer insight at Worldpanel, said: "We're still well past the point at which price rises really start to bite and consumers are continuing to adapt their behaviour to make ends meet."
Visits to casual and fast-service restaurants fell 6% in the three months to mid-July, though coffee shops bucked the trend.
Shoppers also turned towards at-home spending, with branded grocery sales up 6.1%, outpacing the 4.1% rise in own-label items.
Tesco strengthened its lead, with sales up 7.4% year-on-year to £10.15bn for a 28.4% share of the market, while Lidl and Ocado were the fastest-growing retailers, each up 10.7%.
Asda sales slipped 2.6% and the Co-op fell 3.2%.
In the US, S&P Global Ratings reaffirmed its AA+ credit rating with a stable outlook, citing tariff revenues as a counterbalance to the fiscal strain from president Donald Trump's tax and spending package.
"Treasuries remained steady after S&P Global Ratings confirmed its AA+ long-term and A-1+ short-term ratings for the US," Munnelly said.
The ratings agency added that trade policy changes would not weigh on the "resilience and diversity" of the US economy, though warned deficits could put pressure on the rating if political gridlock prevents budgetary reform.
Fresh data also pointed to mixed signals in the US housing market.
Building permits fell 2.8% in July to an annualised rate of 1.35m, the lowest since June 2020 and below forecasts, driven by a 9.9% drop in permits for multi-unit housing.
However, housing starts rose 5.2% to 1.42m, the strongest increase in five months, with gains led by multi-unit projects.
JD Sports in the green, defence plays slump
On London's equity markets, JD Sports climbed after Deutsche Bank lifted its price target on the retailer to 100p from 85p, boosting sentiment around the stock.
BHP also advanced, with investors encouraged by a dividend that came in stronger than expected, helping to counterbalance a fall in full-year profits to a five-year low amid weaker Chinese demand and softer iron ore prices.
"A lift in the dividend payout ratio from BHP does seem to have gone some way to salving any concern among investors about a drop in earnings," said Hewson.
"The dividend itself was actually lower thanks to the lower earnings but the decision to dole out a greater proportion of these earnings is instructive.
"It shows the business is feeling reasonably confident about the outlook despite the short-term hit it has taken from exposure to weaker iron ore prices.
"It also reflects a strong cash flow performance which meant borrowings were lower than anticipated."
Plus500 initially gained after announcing its first move into Latin America with a new office in Colombia, but the fintech group later pared back advances to end the session flat.
Defence stocks were under pressure, with BAE Systems, Babcock International and Rolls-Royce all falling as hopes for progress in Ukraine peace talks weighed on the sector.
Mid-cap peers Chemring and Qinetiq also declined.
International Workplace Group was among the sharpest fallers after warning that full-year earnings would come in at the lower end of its forecast range.
The Regus owner said adjusted core earnings rose to $262m in the first half from $247m last year but expects annual earnings of between $525m and $565m, as higher investment in its managed and franchise businesses pressures short-term profitability.
Reporting by Josh White for Sharecast.com.
Market Movers
FTSE 100 (UKX) 9,189.22 0.34%
FTSE 250 (MCX) 21,833.26 0.38%
techMARK (TASX) 5,329.69 0.02%
FTSE 100 - Risers
JD Sports Fashion (JD.) 93.90p 6.95%
Marks & Spencer Group (MKS) 358.60p 3.46%
Diageo (DGE) 2,101.00p 3.24%
Persimmon (PSN) 1,130.00p 3.10%
IMI (IMI) 2,316.00p 2.93%
Bunzl (BNZL) 2,334.00p 2.82%
Next (NXT) 12,105.00p 2.76%
Kingfisher (KGF) 277.50p 2.70%
WPP (WPP) 388.10p 2.56%
CRH (CDI) (CRH) 8,380.00p 2.42%
FTSE 100 - Fallers
Babcock International Group (BAB) 969.00p -7.45%
Fresnillo (FRES) 1,625.00p -4.19%
BAE Systems (BA.) 1,721.00p -3.88%
Rolls-Royce Holdings (RR.) 1,059.50p -2.08%
BT Group (BT.A) 210.50p -1.59%
Airtel Africa (AAF) 214.60p -1.11%
Severn Trent (SVT) 2,567.00p -1.04%
United Utilities Group (UU.) 1,120.50p -1.02%
Melrose Industries (MRO) 587.60p -0.78%
Games Workshop Group (GAW) 15,650.00p -0.76%
FTSE 250 - Risers
Burberry Group (BRBY) 1,170.00p 5.07%
B&M European Value Retail S.A. (DI) (BME) 233.70p 4.61%
Dr. Martens (DOCS) 84.45p 4.19%
Frasers Group (FRAS) 708.50p 4.11%
WH Smith (SMWH) 1,117.00p 4.00%
Aston Martin Lagonda Global Holdings (AML) 78.05p 3.58%
Domino's Pizza Group (DOM) 206.00p 3.57%
Watches of Switzerland Group (WOSG) 339.60p 3.47%
Trainline (TRN) 274.00p 3.09%
Pets at Home Group (PETS) 234.60p 2.99%
FTSE 250 - Fallers
International Workplace Group (IWG) 200.00p -12.82%
W.A.G Payment Solutions (WPS) 84.80p -5.15%
QinetiQ Group (QQ.) 470.80p -3.80%
Bluefield Solar Income Fund Limited (BSIF) 93.30p -3.22%
Chemring Group (CHG) 528.00p -2.76%
Close Brothers Group (CBG) 485.00p -2.73%
Hochschild Mining (HOC) 290.40p -2.62%
Auction Technology Group (ATG) 332.50p -2.49%
Workspace Group (WKP) 406.50p -2.17%
Harworth Group (HWG) 174.50p -1.97%
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