FTSE 100 Live Thursday
- GDP rallied ahead of tariffs
- Aviva upbeat on 2025 outlook
- Food firms strike £1.2bn deal
Market update: FTSE 100 struggles, MoD contracts boost Serco
10:22 , Graeme EvansWeaker oil stocks and a mixed set of corporate results today ensured the FTSE 100 index failed to benefit from the UK's move into the fast lane of economic growth.
The decline of 0.3% or 27.19 points to 8557.82 also reflected the prospect of a poorer session for the S&P 500, having rebounded 18% from its low on 8 April.
BP fell 4% or 14.2p to 366.8p after its shares were marked ex-dividend and Brent Crude futures fell 3% to below $64 a barrel.
The price weakness was driven by oversupply concerns after a weekly report on US oil inventories came in higher than expected.
Shell also weakened 62p to 2452.5p, while declines of 2% for Glencore and Anglo American capped a poor session for investors in the commodities sector.
Private equity group 3i topped the FTSE 100 fallers board, declining 265p to 3932p after its key benchmark of net asset value came in short of City forecasts.
The miss, which was driven by a loss on FX translation, clouded another strong year for the owner of Action discount chain after it reported a total return of £5 billion or 25% on opening shareholders' funds.
Accounting software business Sage also fell sharply in the wake of half-year results, even though underlying operating profit increased by 16% to £288 million. There was no change in 2025 guidance for organic total revenue growth of 9% or above.
National Grid annual results drew a stronger response, rising 22.5p to 1038p after its earnings per share figure of 73.3p beat the City consensus by about 1p.
At the top of the blue-chip risers board, JD Sports Fashion jumped 3% or 2.7p to 92.7p after interest in the transatlantic retailer was boosted by speculation that Dick’s Sporting Goods is close to a $2.3 billion takeover of Foot Locker.
Other risers included BAE Systems, which lifted 28.5p to 1729.5p, and Rolls-Royce after an improvement of 8.4p to 805.4p.
The FTSE 250 index drifted 63.18 points to 20,756.39, despite today’s first quarter figures showing that the UK economy grew by 0.7% rather than the 0.6% forecast.
Economists said this may be as good as it gets for this year, given the impact of tax rises and imposition of US tariffs in the current quarter.
ITV featured among the FTSE 250 fallers after it reported a tough comparable period for advertising revenue.
An improvement in sales of content to customers including Netflix and Amazon Prime offset the downturn, but shares still dropped 2.5p to 76.5p.
Serco led the mid-cap benchmark, rising 6% or 10.3p to 185.3p after the outsourcing group said it had been awarded three MoD maritime services contracts valued at over £1 billion to support the Royal Navy.
ITV Studios returns to growth, ad revenues drop
09:16 , Graeme EvansITV shares have fallen 1.5p to 77.5p after a decline in first quarter advertising revenues offset a stronger performance by its content division.
ITV Studios returned to growth following the impact of the US strikes, with the company expecting the improvement in its performance to build as the year goes on.
New scripted programmes included Run Away for Netflix and The Better Sister and The Devil's Hour for Amazon Prime Video.
Media & Entertainment division revenues declined 3% to £489 million, with total advertising revenues (TAR) down 2% as previously guided. Within this, digital advertising revenue grew 15%.
TAR is expected to be down around 14% in the second quarter and by 8% in first half, reflecting strong comparatives against Euro 2024.
FTSE 100 lower as oil giants retreat, National Grid up 3%
08:36 , Graeme EvansBP shares are 5% or 18.5p lower at 362.5p after the Brent Crude price dipped below $64 a barrel and the stock traded without the right to the latest dividend.
Shell also dipped 70.5p to 2444p after oversupply fears caused by a spike in US oil inventories triggered a 3% decline in the oil benchmark.
Other commodity stocks were under pressure in London’s top flight as Anglo American weakened 51.5p to 2149p and Glencore reversed 5.45p to 268.3p.
Private equity group 3i posted the biggest fall of the session, losing 7% or 279p to 3918p as annual results prompted investors to lock in some of their recent gains.
Accounting software business Sage also retreated 69p to 1210.5p after posting interim results.
Half-year figures slightly ahead of expectations helped National Grid rise 3% or 27.5p to 1043p but the FTSE 100 index fell 0.5% or 40.74 points to 8544.27.
Aviva upbeat after strong start to year
08:26 , Graeme EvansAviva shares consolidated their recent gains today after chief executive Amanda Blanc said the insurer had got off to “great start” in 2025.
General insurance premiums increased by 9%, boosted by a travel insurance partnership with Nationwide and the benefits of acquiring Lloyd’s insurer Probitas.
In the Wealth business, Aviva secured £2.3 billion of net flows representing 5% of opening assets under management. Retirement sales of £1.8 billion were up 4%, driven by higher volumes in individual annuities and equity release.
Blanc said: “We continue to be very positive about the outlook for 2025.
“Our balance sheet is strong, we have a clear customer-focused strategy which we continue to deliver at pace and our market-leading businesses are growing well, especially in capital-light areas.
“We are increasingly confident about Aviva’s prospects and meeting our financial targets.”
The group, which expects to complete its £3.7 billion acquisition of Direct Line in the middle of this year, fell 1.8p to 570.2p. However, the shares have risen 20% this year.
Business investment drives Q1 GDP surprise
07:52 , Graeme EvansA 5.9% quarter-on-quarter jump in business investment accounted for the bulk of today’s surprise UK GDP reading of 0.7%.
Capital Economics said this looked to be “completely at odds” with the plunge in business confidence triggered by large rises in wage costs and US tariff concerns.
It notes the investment was driven by large rises in aircraft, IT equipment and machinery equipment, all of which are areas that President Trump has targeted with tariffs.
The consultancy believes it’s probably the case that businesses spent to get ahead of US tariffs imposed in mid-March and at the start of April.
It added: “Overall, the main reason why GDP was stronger than everyone expected appears to be because US and UK tax changes meant that more activity was pulled forward into Q1 from Q2 rather than because the UK economy is fundamentally stronger.
“This means Q2 may well be weaker than widely expected (before today our forecast was 0.0% q/q) and the best part of the year may already be behind us.”
Supermarket food firms unveils merger deal
07:35 , Graeme EvansFTSE 250-listed Greencore and Bakkavor today unveiled a deal to create a leading UK convenience food business with a combined revenue of £4 billion.
The cash and shares offer by supermarket sandwiches supplier Greencore values ready meals business Bakkavor at £1.2 billion.
Bakkavor supplies about 3500 products across meals, pizza & bread, salads and desserts to leading grocery retailers in the UK and US, and international food brands in China.
About 85% of revenues are from the UK, with its key customers including Tesco, M&S and Sainsburys.
Support for the deal has been received from the holders of 69.4% of shares, including Bakkavor founders Agust and Lydur Gudmundsson.
Greencore chief executive Dalton Philips said the combination was an “unrivalled opportunity to create a true UK national food champion” with a greater breadth of category range and deeper customer relationships.
He added: “We are bringing together two experienced teams and our complementary portfolios will drive benefits for customers and consumers across the UK.
“The combined group will be able to invest more in innovation and product development ensuring we can provide the consumer with greater food choices at more points in the day.”
Q1 GDP figure beats expectations
07:05 , Graeme EvansThe UK economy performed better than expected at the start of this year, figures published by the Office for National Statistics showed today.
GDP growth of 0.7% for the first quarter compared with City forecasts of 0.6% and 0.1% for the final quarter of 2024.
The performance - the best since the start of 2024 - covers the period before tax rises and announcements on US tariffs came in during April.
Schroders senior economist George Brown said: "It is encouraging to see the UK economy begin 2025 on a firm growth footing.
“But growth in the years since the pandemic has followed a common pattern of strong starts that later fizzle out, pointing to seasonal adjustment issues.”
He added: “While a UK-US trade deal will see the US lower tariffs on some goods, the UK, as a highly open economy, will still suffer from any global slowdown.
“This will put further pressure on the public finances, potentially requiring the Chancellor to opt for spending cuts or tax hikes, or some combination of the two."
Brent Crude down more than 2%, FTSE 100 seen flat
06:59 , Graeme EvansThe price of Brent Crude is down more than 2% after figures yesterday showed a bigger-than-expected rise in US oil inventories.
The benchmark today traded near $64.48 a barrel amid the concerns over oversupply.
Meanwhile, the FTSE 100 index is set to open broadly unchanged after the Dow Jones Industrial Average and S&P 500 index closed near their opening marks.
In Asia, leading benchmarks including the Nikkei 225 are down by between 0.5% and 1%.
