LONDON (ShareCast) - (Sharecast News) - London stocks finished higher on Tuesday, buoyed by investor optimism over potential easing of US tariffs on automobiles and a raft of corporate updates.
The FTSE 100 index rose 0.55% to close at 8,463.46, while the FTSE 250 advanced 0.39% to 19,809.72 points.

Currency markets were more subdued, with sterling last down 0.23% on the dollar to trade at $1.3403, as it slipped 0.06% against the euro, changing hands at €1.1753.

"US indices have entered a period of quiet trading as we await the latest batch of earnings from tech companies," said IG chief market analyst Chris Beauchamp.

"But bearishness among individual investors has reached levels not seen in fourteen years, according to today's Conference Board data.

"Almost half those surveyed expect stocks to go down over the next 12 months."

Beauchamp said that historically, such overwhelming caution was a great sign that a rebound was on the cards, although he added that investors cpi;d be forgiven their cautiousness after the madness of the last month.

"Amazon's decision to display the cost of tariffs puts it on a collision course with the Trump administration.

"Other companies have taken quieter routes to make their case to the president, but it is clear that Bezos plans a more obvious approach.

"The gap between US companies and their government continues to grow, providing global investors with yet another reason to stay cautious on US assets."

Supermarket sales rise as grocery deflation slows

In economic news, supermarket sales in the UK climbed sharply in April as consumers spent freely ahead of a late Easter, despite mounting food inflation.

According to Kantar data released Tuesday, take-home grocery sales rose 6.5% in the four weeks to 20 April, even as grocery price inflation accelerated to 3.8% from 3.5% in March.

Prices for butter, coffee, and chocolate rose particularly sharply, with chocolate confectionery up 17.4% year-on-year.

However, spending on chocolate still increased by 11%.

Among retailers, Tesco posted a 6% rise in sales over the 12-week period, boosting its market share to 27.8%, while Sainsbury's sales rose 4.4%.

Discounters Aldi and Lidl also posted strong gains, up 5.9% and 10.1% respectively, and Ocado recorded the fastest growth at 11.8%.

Asda was the only major grocer to suffer a decline, with sales down 3.8%.

"The grocers have been sharpening their pricing strategies to stay competitive in the fight for footfall," said Fraser McKevitt, head of retail and consumer insight at Kantar.

"They've invested in price cuts, which were the main driver of promotional growth.

"Often linked to loyalty cards, spending on these deals grew by £347m."

Separately, broader retail price data pointed to continued softness in shop prices overall.

The British Retail Consortium reported that shop prices were 0.1% lower than a year earlier in April, easing from a 0.4% fall in March.

Non-food prices continued to decline, albeit at a slower pace, while food prices rose by 2.6%, the sharpest increase in nearly a year, driven by higher labour costs.

According to Helen Dickinson, chief executive of the BRC, "the days of shop price deflation look numbered".

"Everyday essentials including bread, meat, and fish, all increased prices on the month.

"This comes in the same month retailers face a mountain of new employment costs in the form of higher employer National Insurance Contributions and increased National Living Wage."

On the continent, economic sentiment weakened in April, according to a survey from the European Commission.

Its economic sentiment indicator fell by 1.4 points in both the EU and the eurozone, to 94.4 and 93.6 respectively, falling short of expectations for the single-currency area.

Employment expectations also edged lower across the EU, although they remained steady within the eurozone.

Meanwhile, consumer sentiment in Germany showed unexpected strength.

A survey by GfK and the Nuremberg Institute for Market Decisions revealed that Germany's consumer climate Indicator rose to -20.6 for May, the highest in six months.

Income expectations and willingness to spend also improved, reflecting optimism following recent public sector wage agreements, though overall confidence remains muted compared to historical norms.

AB Foods plunges on sugar division performance

On Liondon's equity markets, Associated British Foods slumped 9.16% after the Primark owner reported a 10% fall in first-half profits, as growth in its retail and food ingredients businesses was offset by weakness in the sugar division.

Group revenues slipped 2% to £9.51bn, although the interim dividend was held steady.

Elsewhere, THG tumbled 10.69% as the ecommerce group reported falling revenue and wider losses for 2024, despite management efforts to streamline operations.

Breedon Group fell 5.35% after a first-quarter update flagged weather-related disruptions in the US, even as revenues grew 9%.

Other notable fallers included Mobico Group, down 2.98%, following news of its chief executive officer's departure shortly after a major profit warning.

BP shed 2.58% after posting first-quarter profits below expectations, citing weaker oil prices, while Ashtead slipped 2.37% after RBC Capital Markets downgraded the stock.

Beazley dropped 3.47% after reiterating its full-year outlook but highlighting pressure on premium rates.

Savills and Elementis both saw modest declines after leadership changes and in-line results, respectively.

On the upside, Entain rallied 3.28% after reporting a strong start to the year and confirming the appointment of Stella David as permanent CEO.

HSBC advanced 2.97% as the banking giant beat profit expectations with a $9.5bn first-quarter result and launched a $3bn share buyback, despite raising provisions for bad loans.

Kitchens specialist Howden Joinery Group surged 4.6% after outlining expansion plans and reaffirming its trading outlook.

Travis Perkins gained 4.16%, shrugging off weaker sales figures, while Telecom Plus rose 1.83% after posting record growth and reaffirming guidance.

NCC Group edged up 0.83% amid reports it is exploring strategic options for its Escoe division.

Reporting by Josh White for Sharecast.com.

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