London close: Stocks slip as geopolitical caution resurfaces
By Josh White
Date: Wednesday 25 Jun 2025
(Sharecast News) - London stocks closed negative territory on Wednesday as investor caution resurfaced amid ongoing geopolitical tensions despite a fragile ceasefire between Israel and Iran.
The FTSE 100 index was down 0.46% at 8,718.75 points, while the FTSE 250 edged 0.13% lower to 21,298.04 points.
In currency markets, sterling was last up 0.18% on the dollar, trading at $1.3640, while it was steady against the euro to change hands at €1.1727.
"London's primary stock indices remained largely unchanged to modestly lower heading into the close on Wednesday as investors assessed a series of corporate earnings while also monitoring the fragile ceasefire between Israel and Iran," said TickMill market strategy partner Patrick Munnelly.
"Global markets experienced a surge earlier in the week following a ceasefire between Iran and Israel, which ended a 12-day air conflict between the two rivals.
"Nonetheless, caution prevailed, and Washington described the ongoing discussions with Tehran regarding a long-term peace agreement as 'promising'."
Munnelly said investors were now turning their attention to a new wave of corporate earnings reports.
"The blue-chip index saw a 13.3% increase led by the defence engineering firm Babcock, which raised its medium-term forecasts, anticipating benefits from increased defence spending.
"Labour market statistics indicated weakening conditions, as wage growth trailed behind inflation and job vacancies declined - factors crucial for policy making.
"On Tuesday, Bank of England governor Andrew Bailey highlighted evidence of a more subdued labour market and stated that interest rates were expected to continue decreasing."
Supermarket sales accelerate, car registrations fall in Europe
In economic news, UK supermarket sales accelerated in June, supported by warm weather and Father's Day spending, according to data from NielsenIQ.
Total sales rose 3.8% in the four weeks to 14 June, up from 3% in May, driven by demand for outdoor dining and healthier food such as yoghurt and fresh fruit.
However, average spend per visit fell 2.5% to £18.61 as shoppers continued to prioritise promotions amid economic uncertainty.
Tesco led the market with a 6.6% increase in sales, while Sainsbury's grew 5.8%.
Discounters Lidl and Aldi posted strong gains of 11.2% and 7.1%, respectively.
Waitrose saw a 5.5% rise, while Ocado surged 15.6%.
Sales declined at Asda by 1.6% and fell 3.8% at the Co-operative, which had been hit by a cyberattack.
Marks & Spencer's food sales also slowed, with growth easing to 9.1% from 10.8% in May.
"In the first six weeks of summer, shoppers have spent £700m more, and 75% of that has been in fresh and chilled foods," said Mike Watkins, head of retailer and business insight at NIQ.
"A sustained period of summer weather through to the first week of September would be helpful to the industry as this would tip the balance back to positive unit growth."
On the continent, European car registrations rose 1.6% year-on-year in May, according to the European Automobile Manufacturers Association.
While sales of petrol and diesel vehicles fell sharply - down 18.6% and 27.6% respectively - strong demand for electric and hybrid models drove growth.
Battery electric car sales climbed 25% to 142,776, plug-in hybrids jumped 46.9%, and hybrid electrics rose 16%.
Hybrid vehicles made up 34.1% of the market, while battery electrics increased their share to 15.4%.
Volkswagen, Renault, BMW and Mercedes-Benz posted solid gains, but Stellantis, Hyundai and Toyota reported declines.
Tesla saw the sharpest drop, with sales plunging 40.5% amid an ongoing boycott linked to Elon Musk's political activities.
In the US, mortgage applications rose 1.1% last week, recovering slightly from a 2.6% decline, according to the Mortgage Bankers Association.
Refinancing activity rose 3%, while purchase applications remained flat despite a modest rise in mortgage rates.
Meanwhile, US new home sales slumped 13.7% in May, the largest monthly decline since June 2022, as high borrowing costs continued to weigh on affordability.
Sales totalled 623,000, well below forecasts, and down 6.3% from a year earlier.
The supply of new homes rose to 9.8 months at the current sales rate, up from 8.3 months in April, while median prices increased 3.7% to $426,600.
Babcock leads defence names higher, WPP slides
On London's equity markets, Babcock International soared 11.23% after it announced it would hit its 8% operating margin target a year earlier, and raised its medium-term goal.
The company reported a sharp rise in annual operating profit to £364m from £241.6m and unveiled a £200m share buyback, citing rising global demand for weapons systems.
Rolls-Royce rose 1.01% and BAE Systems added 0.97% in sympathy.
THG jumped 15.29% after reporting stronger second-quarter trading, with its beauty and nutrition divisions both returning to revenue growth in constant currency.
Warehouse REIT gained 5.81% after agreeing to a £485m takeover by Tritax Big Box REIT, which fell 1.51% following the deal.
Burberry climbed 4.64% as Morgan Stanley and HSBC raised their price targets on the stock.
On the downside, WPP slid 3.26% after being downgraded to 'underweight' by Barclays.
Moonpig lost 4.13% ahead of its full-year results on Thursday.
Pearson slipped 0.9% after JPMorgan Cazenove cut its price target, citing an expectedly muted first half before growth picks up later in the year.
Reporting by Josh White for Sharecast.com.
Market Movers
FTSE 100 (UKX) 8,718.75 -0.46%
FTSE 250 (MCX) 21,298.04 -0.13%
techMARK (TASX) 5,028.75 -0.08%
FTSE 100 - Risers
Babcock International Group (BAB) 1,144.00p 10.75%
JD Sports Fashion (JD.) 78.42p 2.27%
Fresnillo (FRES) 1,439.00p 2.06%
Scottish Mortgage Inv Trust (SMT) 1,022.50p 1.74%
Halma (HLMA) 3,206.00p 1.27%
International Consolidated Airlines Group SA (CDI) (IAG) 331.30p 1.16%
Melrose Industries (MRO) 520.20p 1.09%
Beazley (BEZ) 932.50p 1.08%
BAE Systems (BA.) 1,819.00p 1.00%
Prudential (PRU) 918.20p 0.92%
FTSE 100 - Fallers
WPP (WPP) 505.00p -3.26%
Flutter Entertainment (DI) (FLTR) 19,755.00p -2.59%
easyJet (EZJ) 525.20p -2.56%
Anglo American (AAL) 2,005.50p -2.41%
Berkeley Group Holdings (The) (BKG) 3,816.00p -2.20%
Croda International (CRDA) 2,993.00p -2.19%
Coca-Cola HBC AG (CDI) (CCH) 3,766.00p -2.18%
Imperial Brands (IMB) 2,830.00p -2.04%
3i Group (III) 3,949.00p -2.01%
CRH (CDI) (CRH) 6,550.00p -1.98%
FTSE 250 - Risers
Burberry Group (BRBY) 1,062.50p 4.78%
Foresight Group Holdings Limited NPV (FSG) 422.00p 4.71%
Raspberry PI Holdings (RPI) 454.40p 4.70%
Oxford Instruments (OXIG) 1,848.00p 3.58%
IP Group (IPO) 49.00p 2.73%
Alpha Group International (ALPH) 3,160.00p 2.60%
HarbourVest Global Private Equity Limited A Shs (HVPE) 2,580.00p 2.58%
Renishaw (RSW) 2,810.00p 2.18%
Hochschild Mining (HOC) 248.80p 2.05%
Spire Healthcare Group (SPI) 217.00p 1.88%
FTSE 250 - Fallers
Just Group (JUST) 134.20p -5.89%
Tate & Lyle (TATE) 510.00p -4.23%
Moonpig Group (MOON) 242.50p -4.13%
Wizz Air Holdings (WIZZ) 1,047.00p -3.59%
Keller Group (KLR) 1,432.00p -3.11%
Ocado Group (OCDO) 233.20p -2.75%
Tritax Big Box Reit (BBOX) 146.30p -2.72%
Diversified Energy Company (DEC) 1,084.00p -2.60%
Savills (SVS) 977.00p -2.50%
Workspace Group (WKP) 411.50p -2.37%
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