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London stocks on the FTSE 100 gained in early trade on Friday as optimism over US trade deals boosted sentiment.
At 0825 BST, the FTSE 100 was 0.4% firmer at 8,561.32.
Derren Nathan, head of equity research at Hargreaves Lansdown, said: “The diplomatic offensive presented conjointly by President Trump and Keir Starmer from Washington and Solihull has ignited a feint spark of optimism in equity markets. The coincidence with VE day commemorations seemed designed to underline the special relationship between the two allies. With details emerging late in the day it wasn’t enough to prevent a down day on the FTSE – but sentiment has picked up this morning with the index set to open higher.
“There may be some disappointment that the baseline 10% tariffs remain in place but for certain industries the picture on trade restrictions are looking up. While pharmaceuticals have escaped the US Presidents wrath for now, UK companies in the sector and other knowledge-intensive areas have been promised preferential treatment. As yet, that’s not come at the expense of lifting the 2% Digital Services Tax Britain applied to the likes of YouTube and eBay, but with more talks to come on a separate digital services deal, it’s likely to form part of negotiations.”
Investors were also looking ahead to trade talks between the US and China, due to take place over the weekend in Switzerland.
Nathan said: “Donald Trump’s hinted there may be some scope to reduce the 145% border tax on Chinese goods if discussions go well. So far, the measures haven’t done huge damage to China’s economy. Exports from the People’s Republic grew 8.1% in April much higher than the 1.9% expected. But, notably, shipments to the US were down 2.5%. That cuts both ways with imports from America falling 4.7%, reflecting the 125% tariff imposed by Beijing.
“But US relations with China aren’t quite as friendly as they are with Whitehall and there’s speculation that these negotiations could be more protracted.”
In equity markets, British Airways owner IAG rose as it held annual guidance after a surge in first-quarter operating profits, adding that second quarter revenue was ahead of last year.
Operating profit before exceptional items increased by €130m to €198m as strong revenue growth and a lower fuel price offset expected cost increases, IAG said.
Rightmove was just a smidgen higher as it reiterated its full-year 2025 guidance, expecting 8% to 10% revenue growth and a 70% underlying operating profit margin, supported by continued ARPA growth and rising membership across its core business.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Airtel Africa Plc | +3.72% | +5.80 | 161.80 |
| 2 |  |
Bp Plc | +3.07% | +10.90 | 366.40 |
| 3 |  |
Centrica Plc | +2.11% | +3.10 | 150.15 |
| 4 |  |
Shell Plc | +1.64% | +40.00 | 2,476.00 |
| 5 |  |
Sse Plc | +1.57% | +26.50 | 1,716.50 |
| 6 |  |
Informa Plc | +1.48% | +11.40 | 784.00 |
| 7 |  |
Anglo American Plc | +1.47% | +30.00 | 2,075.00 |
| 8 |  |
Haleon | +1.45% | +5.80 | 405.00 |
| 9 |  |
International Consolidated Airlines Group S.a. | +1.38% | +4.00 | 294.30 |
| 10 |  |
Glencore Plc | +1.36% | +3.45 | 256.25 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Bae Systems Plc | -1.58% | -27.50 | 1,718.50 |
| 2 |  |
British American Tobacco Plc | -1.20% | -39.00 | 3,200.00 |
| 3 |  |
Intercontinental Hotels Group Plc | -1.00% | -88.00 | 8,682.00 |
| 4 |  |
Next Plc | -0.89% | -110.00 | 12,240.00 |
| 5 |  |
Prudential Plc | -0.70% | -5.80 | 824.80 |
| 6 |  |
Barratt Redrow Plc | -0.68% | -3.20 | 468.30 |
| 7 |  |
Weir Group Plc | -0.50% | -12.00 | 2,392.00 |
| 8 |  |
Imperial Brands Plc | -0.49% | -15.00 | 3,066.00 |
| 9 |  |
London Stock Exchange Group Plc | -0.39% | -45.00 | 11,405.00 |
| 10 |  |
Vodafone Group Plc | -0.34% | -0.24 | 70.06 |
US close: Dow Jones higher following US-UK trade deal announcement
Major indices closed higher on Thursday following the announcement of a new US-UK trade deal.
At the close, the Dow Jones Industrial Average was up 0.62% at 41,368.45, while the S&P 500 advanced 0.58% to 5,663.94 and the Nasdaq Composite saw out the session 1.07% firmer at 17,928.14.
The Dow closed 254.48 points higher on Thursday, extending gains recorded in the previous session as all three major averages logged a winning session.
Thursday’s primary focus was news that the White House had struck a trade deal with Westminster. However, while Donald Trump called the agreement “full and comprehensive” in a post on social media, UK officials offered no confirmation beyond acknowledging ongoing talks. Analysts believed the deal would focus on tariff reductions for key exports such as cars and steel, rather than constituting a broader free trade agreement. Trump claimed the deal was just the “first of many”.
Elsewhere, Donald Trump also took aim at Federal Reserve chairman Jerome Powell yet again on Thursday after the central bank opted to keep its benchmark overnight lending rate unchanged at a range of 4.25% to 4.5% due to heightened economic uncertainty as a result of the White House’s so-called “Liberation Day” tariffs.
“‘Too Late’ Jerome Powell is a FOOL, who doesn’t have a clue. Other than that, I like him very much! Oil and Energy way down, almost all costs (groceries and “eggs”) down, virtually NO INFLATION, Tariff Money Pouring Into the US — THE EXACT OPPOSITE OF “TOO LATE!” ENJOY!,” Trump wrote on social media.
The Federal Reserve’s decision to maintain rates until the economic outlook becomes slightly clearer comes as the “risks of higher unemployment and higher inflation” have risen. Powell also said Trump’s constant derision and criticisms had not impacted the central bank’s thinking “at all”.
“We are always going to do the same thing, which is we are going to use our tools to foster maximum employment and price stability for the benefit of the American people,” said Powell. “We are always going to consider only the economic data, the outlook, the balance of risks and that’s it. That’s all we are going to consider.”
On the macro front, Americans lined up for unemployment benefits at a slower pace in the week ended 3 May, according to the Labor Department. Initial jobless claims fell by 13,000 to 228,000, a sharp contrast when compared to the two-month high of 241,000 from the previous week, while continuing claims fell by 29,000 to 1.87m, easing from the over three-year high seen during April. The four-week moving average, which aims to strip out week-to-week volatility, was 227,000, an increase of 1,000 from the previous week’s unrevised average of 226,000. Meanwhile, the advance seasonally adjusted insured unemployment rate was 1.2% for the week ending 26 April, a decrease of 0.1 percentage point from the previous week’s unrevised rate.
On another note, measured US labour productivity tumbled at the start of 2025, as a surge in imports led to a drop in aggregate demand. According to the Department of Labor, in seasonally adjusted terms, non-farm labour productivity shrank at a quarterly annualised pace of 0.8% during the first quarter (consensus: -0.4%). The drop was the result of 0.6% growth in the number of hours worked, even as output dropped by 0.3% from the previous quarter. In turn, output was dragged down by a surge in net imports as Americans tried to front-run trade tariffs. Unit labour cost growth meanwhile accelerated to a clip of 5.7% (consensus: 5.3%), in comparison to the 2.0% pace of gain observed in the fourth quarter.
Finally, US wholesale inventories rose by 0.4% month-on-month to $907.5bn in March, according to the Census Bureau, falling short of a preliminary reading of 0.5% and following February’s 0.5% increase in February. Durable goods inventories rose 0.6%, while inventories of non-durable goods rose 0.1%. On an annualised basis, wholesale inventories grew 2.2% in March, down slightly from an advance estimate of 2.3%.
Friday newspaper round-up: Centrica, water bills, BlackRock
The owner of British Gas has suffered a shareholder rebellion after handing its chief executive a multimillion pound pay packet while energy bill payers struggle with record levels of debt. Nearly 40% of Centrica’s shareholders voted against the board’s pay plans at the energy company’s annual investor meeting in Manchester on Thursday, after rising criticism of boss Chris O’Shea’s pay during the energy crisis. – Guardian
The average household water bill in England and Wales is likely to reach £2,000 a year by 2050 if supplies are to be maintained, the industry regulator has said. In its submission to the government-commissioned water inquiry, led by Sir Jon Cunliffe, Ofwat said “significant investment” was needed to secure enough water and avoid the country running out, and that this would cause costs to be piled on to water bills in coming years. – Guardian
Donald Trump will slash US tariffs on Range Rovers and other UK-made cars to 10pc as part of a trade deal that also cuts levies on American beef to zero. The Telegraph revealed details of the trade deal on Thursday that will see British carmakers given a quota of 100,000 cars they will be able to send to American shores at lower tariffs. – Telegraph
The countryside on London’s outskirts could soon be concreted over to make way for tower blocks as Sir Sadiq Khan throws his support behind building on the green belt. The Mayor of London will on Friday announce plans to release more of the capital’s green spaces for housing as he launches a consultation on the city’s development strategy for the next two decades. – Telegraph
The world’s biggest investment firm has ordered its senior managers back into the office five days a week, in the latest sign that companies are tightening up their rules on working from home. BlackRock has told its 1,000 or so managing directors around the world, including those in London, that they will be expected to work from the office full-time in future. – The Times
