LONDON (ShareCast) - (Sharecast News) - London stocks ended lower on Friday after disappointing UK GDP figures and renewed trade tensions weighed on investor sentiment.
The FTSE 100 index fell 0.38% to close at 8,941.12 points, while the FTSE 250 lost 0.38% as well, to end the session at 21,613.25 points.

Sterling also retreated sharply, with the pound last down 0.67% on the dollar to trade at $1.3488, and off 0.51% against the euro at €1.1547.

"Overnight Friday, markets took another Trump tariff-inspired swoon south," commented TickMill market strategy partner Patrick Munnelly.

"US president Donald Trump took to television to add new tension to his ongoing trade conflicts, disrupting Wall Street's recent rally to record levels.

"Trump announced that he would send out tariff letters to Canada and Europe 'today or tomorrow', and he proposed that the overall tariff rates on other nations that do not receive a letter could be increased to 15% or 20%, up from the existing 10% baseline."

Trump also shared his letter to Canada on social media, stating that a 35% tariff would be applied to all Canadian goods starting 1 August.

"However, market concerns eased somewhat when an administration official indicated that an exemption was likely for items included under the United States-Mexico-Canada Agreement."

Munnelly also noted that the UK economy was showing signs of fragility, with GDP unexpectedly contracting in May after a decline in April.

"Manufacturing and construction declines outweighed modest services growth.

"Global trade frictions continue to challenge production, while labour market concerns and potential tax hikes weigh on confidence.

"Heatwaves may further dampen activity, making it difficult for the economy to meet the Bank of England's second quarter growth forecast of 0.25%."

UK economy unexpectedly contracts as trade data paints mixed picture

At the top of the macro agenda on Friday was fresh data showing that UK economic activity softened in May, with GDP contracting by 0.1% amid weakness in manufacturing and construction.

The decline defied forecasts of modest growth and followed a 0.3% drop in April.

A small rebound in services, which grew 0.1% month-on-month, failed to offset a 0.9% fall in production and a 0.6% decline in construction output.

Despite the weak monthly reading, GDP rose 0.5% in the three months to May, supported by earlier strength in March and resilience in the services sector.

Year-on-year, the economy expanded by 0.7%, broadly in line with expectations.

The Bank of England is due to meet in August, with markets widely anticipating a rate cut, which would be its third this year.

"Today's data suggests that a sluggish recovery remains the likeliest path in the near-term amid persistent trade uncertainty, a loosening labour market and slowing growth in real incomes," said Ben Jones, lead economist at the CBI.

"And with business costs rising, many firms are maintaining a cautious approach to investment."

Trade data meanwhile painted a mixed picture, with the UK's total goods and services trade deficit widening by £6.7bn to £13.2bn in the three months to May.

While both exports and imports increased modestly, the trade gap expanded sharply.

Exports to the EU rose 2.9% to £14.4bn, and those to non-EU countries were up 1.5% at £14.7bn.

Shipments to the US edged up to £4.4bn, recovering slightly from a steep drop in April but still well below March levels, as UK exporters continued to grapple with ongoing shifts in US trade policy.

Elsewhere, retail footfall across the UK fell again in June.

According to the BRC-Sensormatic monitor, total footfall declined 1.8% year-on-year, following a 1.7% decrease in May.

High streets saw the biggest drop, down 3.0%, while shopping centres and retail parks also recorded fewer visitors, reflecting the impact of extreme weather on consumer activity.

"June delivered heatwaves, storms and what could be the hottest June on record," said Andy Sumpter, retail consultant at Sensormatic.

"One year on from the general election, with footfall still in the red, it appears that consumer confidence has yet to find its feet.

"That said, the rate of decline is easing, and with summer now in full swing, retailers have an opportunity to turn seasonal footfall into sustained momentum."

BP and Fresnillo in the green, SSP falls on broker rating cut

On London's equity markets, BP rose 2.98% despite guidance that second-quarter earnings would be hit by weaker oil and gas prices.

The energy giant noted an uptick in upstream production compared to the previous quarter, which may have supported investor sentiment.

Flutter Entertainment edged up 0.42% after it agreed to buy the remaining 5% stake in FanDuel from Boyd Gaming for just under $1.8bn, giving it full ownership of the US sports betting firm.

Shares in Fresnillo gained 2.59% as rising gold and silver prices amid escalating global trade tensions lifted demand for precious metals.

On the downside, SSP Group fell sharply, down 8.99%, after UBS cut its rating on the stock to 'sell' from 'neutral', warning that consensus expectations looked stretched given the headwinds facing the travel and hospitality sector.

Warehouse REIT dipped 0.35% after it backed a revised £489m takeover bid from Blackstone Europe, bringing the deal closer to completion.

Cyclical stocks also came under pressure following a weaker-than-expected UK GDP reading.

Marshalls dropped 1.67%, while Vistry Group and Savills declined 1.67% and 1.66% respectively.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,941.12 -0.38%
FTSE 250 (MCX) 21,613.25 -0.38%
techMARK (TASX) 5,141.62 -0.57%

FTSE 100 - Risers

Fresnillo (FRES) 1,516.00p 3.48%
BP (BP.) 402.05p 3.42%
British American Tobacco (BATS) 3,788.00p 2.19%
Aviva (AV.) 627.00p 1.72%
Rolls-Royce Holdings (RR.) 988.00p 1.29%
BAE Systems (BA.) 1,899.50p 1.20%
Phoenix Group Holdings (PHNX) 644.00p 1.10%
Admiral Group (ADM) 3,270.00p 0.99%
Glencore (GLEN) 312.50p 0.82%
Imperial Brands (IMB) 2,915.00p 0.66%

FTSE 100 - Fallers

JD Sports Fashion (JD.) 87.66p -3.27%
GSK (GSK) 1,408.50p -3.16%
WPP (WPP) 420.80p -2.91%
Smith & Nephew (SN.) 1,124.00p -2.73%
Croda International (CRDA) 2,978.00p -2.68%
Spirax Group (SPX) 6,180.00p -2.45%
Diageo (DGE) 1,900.50p -2.44%
Barratt Redrow (BTRW) 415.50p -2.37%
Persimmon (PSN) 1,210.50p -2.06%
Ashtead Group (AHT) 4,830.00p -1.83%

FTSE 250 - Risers

Ithaca Energy (ITH) 170.50p 4.22%
Hochschild Mining (HOC) 280.60p 3.54%
Jupiter Fund Management (JUP) 123.40p 2.83%
Endeavour Mining (EDV) 2,280.00p 2.70%
Zigup (ZIG) 337.50p 2.58%
IP Group (IPO) 57.20p 2.51%
Diversified Energy Company (DEC) 1,089.00p 1.97%
Pagegroup (PAGE) 270.40p 1.65%
AJ Bell (AJB) 522.50p 1.55%
Sirius Real Estate Ltd. (SRE) 95.05p 1.49%

FTSE 250 - Fallers

SSP Group (SSPG) 173.10p -7.93%
Close Brothers Group (CBG) 391.60p -3.40%
Watches of Switzerland Group (WOSG) 363.60p -3.30%
Moonpig Group (MOON) 209.50p -3.23%
Ocado Group (OCDO) 234.90p -3.05%
Vistry Group (VTY) 602.40p -3.03%
Oxford Nanopore Technologies (ONT) 148.90p -2.93%
Grafton Group Ut (CDI) (GFTU) 909.10p -2.75%
WH Smith (SMWH) 1,053.00p -2.50%
Bloomsbury Publishing (BMY) 493.50p -2.47%

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