LONDON (ShareCast) - (Sharecast News) - London equities ended Tuesday on a mixed note as investors weighed the implications of the US-China tariff truce and reacted to fresh UK labour market data.
The FTSE 100 index slipped 0.02% to close at 8,602.92 points, while the FTSE 250 rose 0.64% to 20,759.67 points.

In currency markets, sterling was last up 0.49% on the dollar to trade at $1.3241, while it edged down 0.08% against the euro, changing hands at €1.1875.

"Who would have thought that within a matter of weeks US stock indices would be trading back in positive territory for the year," questioned IG senior technical analyst Axel Rudolph.

"Yet, here we are. Slowing US inflation, both headline and core, coupled with China's Finance Ministry announcing a pause in additional tariffs - effectively lowering tariffs on US goods from 34% to 10% - helped heave the Nasdaq 100 and S&P 500 back into positive territory for the year.

"The Dow Jones Industrial Average is closely following suit but the small cap Russell 2000 still lags behind, trading around 5% lower when compared to the beginning of the year."

Rudolph noted that Germany's DAX index was continuing to trade near this week's record high amid a sharp rebound in the country's investor sentiment, with only the FTSE 100 trading slightly lower on the day in Europe, despite UK wage growth coming in slightly below estimates.

"The rally off its four-year low amid supply concerns and ongoing tensions between India and Pakistan puts the oil price on track for its fourth straight day of gains.

"The price of gold managed to find support slightly above last week's low as the US dollar rally seems to be momentarily running out of steam."

UK wage growth slows, retail sales rebound in April

Fresh economic data released on Tuesday pointed to a softening UK labour market, as wage growth slowed and unemployment ticked higher.

Figures from the Office for National Statistics showed regular pay rose 5.6% year-on-year in the three months to March, down from 5.9% previously and well below the 6.4% recorded in the final quarter of 2024.

When including bonuses, wage growth was 5.5%.

Meanwhile, the number of payrolled employees fell by 47,000 in March and dropped 33,000 further in early April, according to preliminary estimates.

The unemployment rate edged up to 4.5%, the highest since mid-2021.

The moderation in wage growth would be welcomed by the Bank of England amid ongoing concerns about inflationary pressure, though businesses were now also facing rising costs from April's changes to minimum wage and employer National Insurance contributions.

"There are signs that the labour market is loosening. Vacancies continued to fall back in March, while employment estimates based on payroll information pointed to a second successive substantial fall in April," said Matt Swannell, chief economic advisor to the EY Item Club.

"Today's data will have given the Monetary Policy Committee slightly more confidence that disinflation is continuing, but it also continues to highlight their difficult balancing act of supporting a weakening labour market that is still generating strong pay growth."

Separately, retail sales rebounded in April as a later Easter and favourable weather boosted consumer spending.

Data from the British Retail Consortium showed total sales rose 7% year-on-year, compared with just 1.1% growth in March.

Food sales climbed 8.2% and non-food sales rose 6.1%, with demand for DIY goods and furniture supported by pre-emptive home buying ahead of upcoming stamp duty changes.

"While the stronger performance was partially a result of Easter falling in April this year, the sunshine prompted strong consumer spending across the board," said BRC chief executive Helen Dickinson.

"Clothing sales, where growth has been sluggish in recent months, also improved as consumers refreshed their wardrobes for the new season."

On the continent, investor confidence in Germany saw a sharp recovery.

The ZEW economic sentiment index jumped to 25.2 in May from -14 in April, well above expectations, although the current conditions index slipped further into negative territory at -82.

Entain and RS Group rise, DCC slumps on below-forecast revenue

On London's equity markets, Entain was higher after UBS upgraded the Ladbrokes owner to 'buy', citing improved long-term prospects and valuation support.

On the FTSE 250, RS Group surged after Bank of America also raised its rating to 'buy', highlighting confidence in the electrical components distributor's growth trajectory.

Elsewhere, Wickes Group posted gains after reporting a 6.9% increase in revenue for the 17 weeks ended 26 April.

The home improvement retailer said it had seen a positive start to the year, with resilient demand from trade customers and a solid performance across its core DIY offering.

Luxury fashion house Burberry also advanced, with investors positioning ahead of its full-year results due on Wednesday.

"Its third-quarter update in January got the thumbs-up from the market as it wasn't as bad as feared," said Russ Mould, investment director at AJ Bell.

"Burberry needs to build on that momentum with its fourth-quarter figures and it also needs to show that Chinese consumers are still willing to buy its wares despite a gloomy economic backdrop caused by Trump's trade war."

Among the day's fallers, DCC dropped sharply after the sales, marketing and support services group reported full-year revenue below analysts' expectations, dampening sentiment despite continued profit growth.

Bytes Technology Group was another notable decliner.

The IT services provider announced a special dividend and raised its full-year shareholder payout following a double-digit rise in annual profits, but the stock fell as investors reacted to a cautious outlook and possible profit-taking.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,602.92 -0.02%
FTSE 250 (MCX) 20,759.67 0.64%
techMARK (TASX) 4,672.77 -0.58%

FTSE 100 - Risers

Entain (ENT) 764.00p 6.02%
International Consolidated Airlines Group SA (CDI) (IAG) 322.70p 3.53%
Anglo American (AAL) 2,237.50p 3.49%
Ashtead Group (AHT) 4,452.00p 3.27%
St James's Place (STJ) 1,095.50p 3.01%
Smurfit Westrock (DI) (SWR) 3,465.00p 2.79%
Spirax Group (SPX) 6,585.00p 2.33%
easyJet (EZJ) 544.00p 2.26%
Experian (EXPN) 3,982.00p 2.15%
Next (NXT) 12,200.00p 2.05%

FTSE 100 - Fallers

DCC (CDI) (DCC) 4,742.00p -6.51%
GSK (GSK) 1,358.00p -2.97%
Diageo (DGE) 2,118.00p -2.71%
SEGRO (SGRO) 648.00p -2.61%
Severn Trent (SVT) 2,576.00p -2.20%
United Utilities Group (UU.) 1,060.50p -2.08%
Haleon (HLN) 396.00p -1.98%
British American Tobacco (BATS) 3,031.00p -1.78%
National Grid (NG.) 1,006.50p -1.76%
Imperial Brands (IMB) 2,890.00p -1.70%

FTSE 250 - Risers

RS Group (RS1) 601.00p 6.28%
Aston Martin Lagonda Global Holdings (AML) 83.85p 6.01%
Burberry Group (BRBY) 826.80p 3.74%
Greggs (GRG) 1,929.00p 3.71%
Dr. Martens (DOCS) 59.75p 3.64%
Playtech (PTEC) 360.00p 3.60%
Coats Group (COA) 78.60p 3.42%
Travis Perkins (TPK) 625.00p 3.39%
Close Brothers Group (CBG) 347.40p 3.33%
Trustpilot Group (TRST) 252.00p 3.19%

FTSE 250 - Fallers

Wizz Air Holdings (WIZZ) 1,664.00p -4.70%
Victrex plc (VCT) 813.00p -3.56%
Just Group (JUST) 142.40p -3.52%
Derwent London (DLN) 1,924.00p -3.46%
Bytes Technology Group (BYIT) 532.00p -3.45%
Genus (GNS) 2,050.00p -3.30%
Pennon Group (PNN) 478.40p -2.25%
Genuit Group (GEN) 404.00p -1.82%
Bellevue Healthcare Trust (Red) (BBH) 121.60p -1.62%
Grainger (GRI) 213.00p -1.62%

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