London close: Stocks weaker in wake of Nvidia results
By Josh White
Date: Thursday 28 Aug 2025
(Sharecast News) - London stocks ended lower on Thursday as investors reacted to underwhelming second-quarter earnings from US chipmaker Nvidia, while a raft of UK-listed companies traded ex-dividend.
"The UK's leading blue-chip and midcap stocks declined for the third straight day on Thursday, primarily due to the pullback from utilities and technology sectors, as investors evaluated the results from chipmaker Nvidia," said Patrick Munnelly, market strategy partner at TickMill.
The FTSE 100 index fell 0.42% to close at 9,216.82 points, while the FTSE 250 slipped 0.28% to 21,744.40 points.
"The UK market was steady on Thursday morning after mixed trading in Asia and modest gains on Wall Street overnight," noted AJ Bell investment director Russ Mould, adding that "Nvidia may have taken a bit of a tumble as its earnings proved mixed but that didn't damage investor sentiment too much on a broader scale."
In currency markets, sterling rose 0.15% on the dollar to trade at $1.3518, but weakened 0.19% against the euro to change hands at €1.1576.
"A modest recovery in the dollar, despite the ongoing concern about the independence of the Federal Reserve, was good news for big US earners like JD Sports and Diageo," Mould said.
"Miners also did some of the heavy lifting for the UK index early on," he added, while noting that "several stocks trading without the rights to their dividends was a mild headwind."
US growth revised higher, initial jobless claims fall
In economic news, US growth was revised higher, with the Commerce Department reporting that second-quarter GDP expanded at an annualised rate of 3.3%, up from an initial 3% estimate and above expectations for 3.1%.
The stronger reading followed a 0.5% contraction in the first quarter, with the revision mainly reflecting firmer consumer spending and investment.
Harun Thilak, head of global capital markets NA at Validus Risk Management, said the data suggested "an economy moving along fairly smoothly and, so far, not showing the weakness many expected from tariffs."
However, he noted that "concerns remain about labour-market softness," contributing to expectations of Federal Reserve rate cuts, with markets pricing an 85% chance of a 25-basis-point reduction in September.
Fresh labour market data meanwhile offered a mixed picture.
Initial jobless claims in the US fell by 5,000 to 229,000 in the week ending 23 August, slightly below forecasts, while continuing claims dipped to 1.954m.
However, the four-week average of claims edged higher to 221,750, its highest in a month, and employment gains had slowed sharply to an average of 35,000 per month over the past quarter, down from 123,000 a year earlier.
"Later on, a second estimate of US GDP for the second quarter and jobless claims data will be in focus as investors try to guess what the Federal Reserve will do at its next summit in mid-September - amid all the noise around the Trump administration's interventions," Mould said earlier, noting that "while Fed chair Jerome Powell seemed to hint a cut was in the offing at Jackson Hole recently, there is ongoing debate about the potential scale of any cut."
On home shores, UK service sector activity weakened further over the summer, with the Confederation of British Industry reporting falling profitability and subdued demand across both business and consumer services.
"The Confederation of British Industry reported a decline in confidence and activity among services businesses this month, urging finance minister Rachel Reeves to postpone any increase in corporate taxes," said Munnelly.
Business and professional services optimism stayed negative for a fourth quarter, at -29%, while profitability dropped to its lowest level since 2020.
Alpesh Paleja, the CBI's deputy chief economist, said the survey "paints a grim picture of the services sector," highlighting that "rising employment costs continue to drive cost pressures higher, while subdued demand conditions are holding pricing power in check."
UK car production rose 5.6% year-on-year in July to 69,127 units, with a 13.7% jump in exports offsetting a 16% fall in domestic demand and an 81.1% slump in commercial vehicle output.
SMMT chief executive Mike Hawes said the growth in car output was "good news - signalling the sector's underlying resilience in the face of intense global competition," but warned that further gains required clearer government support.
Meanwhile, eurozone economic sentiment slipped in August, with the European Commission's confidence index falling to 95.2 from 95.7.
ING said sentiment levels were consistent with "muted growth for the eurozone," but noted that steady bank lending suggested output could improve slightly from the second quarter.
Ex-dividends a drag as Drax and PPHE sink
On London's equity markets, Aviva fell 3.1%, while Croda International, LondonMetric Property, Auto Trader Group and Games Workshop Group also edged lower as they traded without entitlement to dividends.
Drax Group tumbled 7.53% after revealing it was under investigation by the Financial Conduct Authority over historical statements about its biomass sourcing and the compliance of its 2021-2023 annual reports with listing and disclosure rules.
"Having previously drawn fire from the media for the sourcing of wood for its biomass pellets, Drax now faces the potentially more serious situation of being under the harsh glare of the Financial Conduct Authority over the same issue," Mould said.
"There will be concern about any sanction levied by the FCA but also what it might mean for the subsidies the company continues to receive from government.
"The share price reaction shows the market is concerned about the impact this could have on the business."
PPHE Hotel Group slumped 16.16% after warning that normalising room rates and rising costs were squeezing margins, even as total revenue for the first half rose 4.7% to £199.9m and occupancy improved.
Hunting shed 2.86% after maintaining full-year guidance but cautioning that market uncertainty could weigh on results.
On the upside, Softcat gained 3.77% after forecasting high-teens growth in full-year gross profits and mid-teens growth in operating profits, supported by strong trading and large project conversions.
"Shares of Softcat, a provider of IT services and infrastructure, have risen by 2.5% to 1,604p ... the company anticipates mid-teens growth in its operating profit for the fiscal year, an improvement from the previously announced low-teens growth," Munnelly noted.
JD Sports Fashion rose 2.81% after Berenberg lifted its price target to 155p and reiterated its 'buy' rating, saying the retailer's valuation "fails to reflect the company's potential for moderate growth, margin recovery and strong free cash flow."
Reporting by Josh White for Sharecast.com.
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN