London close: FTSE finishes flat ahead of Trump tariff deadline
By Josh White
Date: Friday 04 Jul 2025
(Sharecast News) - London stocks ended Thursday little changed at the top tier but weaker further down the board, as investors weighed fresh economic data and cautious sentiment ahead of Donald Trump's 9 July tariff deadline next week.
The FTSE 100 index finished virtually flat, slipping just 0.003% to close at 8,822.91 points, while the FTSE 250 dropped 0.67% to 21,557.34 points.
In currency markets, sterling was last down 0.04% on the dollar to trade at $1.3649, as it fell 0.22% versus against the euro, changing hands at €1.1589.
"Surprise at US jobs market resilience and Congress passing Trump's tax-cut bill helped to drive Wall Street higher last night, yet the party did not extend to Europe at the end of the trading week," said Dan Coatsworth, investment analyst at AJ Bell.
"European indices were all in the red as a lack of corporate news shifted investors' focus to the imminent end of Trump's 90-day pause on higher trade tariffs.
"Unsurprisingly, defensive stocks were top of investors' shopping lists as they sought industries that should tick over without any drama regardless of what's happening in the world such as telecoms, groceries, utilities and tobacco producers."
Coatsworth noted that Vodafone, Sainsbury's and BT were among the top risers on the top-flight index on Friday, although their strength was not enough to offset weakness from the mining sector.
"Trump is getting his box of stamps ready to send letters to countries detailing tariff rates on imports to the US.
"Like an A-Level student nervously opening their exam results, governments in parts of the world will be having butterflies in their stomach once their letter arrives.
"Trade officials have been working hard to get rates as low as possible, but indications of 20% to 30% tariffs on the first batch of letters would suggest they are still high enough to cause some pain."
UK construction activity still subdued, new car registrations jump in June
In economic news, UK construction activity remained subdued in June, with output still in contraction but showing signs of stabilisation.
The S&P Global construction PMI rose to 48.8 from 47.9 in May, remaining below the 50 threshold that separates growth from decline.
Commercial construction was the weakest performer, with activity falling at its fastest pace since May 2020, driven by weak economic conditions and reduced investment.
Civil engineering also contracted for a sixth consecutive month.
Housebuilding, however, offered a modest bright spot, recording its first expansion since September 2024.
"June data highlighted a sustained downturn in UK construction output, albeit at the slowest pace in six months," said Tim Moore, economics director at S&P Global Market Intelligence.
"Shrinking workloads in the commercial and civil engineering segments weighed on total industry activity. Commercial activity fell at the sharpest rate in just over five years.
"On a brighter note, house building was the best performing area of the construction sector."
The automotive sector meanwhile showed stronger momentum.
New car registrations climbed 6.7% year-on-year in June to 191,316 units, their highest level for the month since 2019, according to the Society of Motor Manufacturers and Traders.
Fleet sales led the gains with an 8.5% rise, while private sales were up 5.9%.
Business registrations fell sharply, down 15.8%. Battery electric vehicle registrations surged 39.1%, helping lift the electrified segment to a 48.5% market share.
Still, overall registrations remain 14.4% below pre-pandemic levels.
"A second consecutive month of growth for the new car market is good news, as is the positive performance of EVs," said the SMMT's Mike Hawes.
"That EV growth, however, is still being driven by substantial industry support with manufacturers using every channel and unsustainable discounting to drive activity, yet it remains below mandated levels.
"As we have seen in other countries, government incentives can supercharge the market transition, without which the climate change ambitions we all share will be under threat."
On the continent, eurozone construction output fell at its fastest rate in three months, with the HCOB PMI slipping to 45.2 in June from 45.6 in May.
Housing was again the weakest segment, while commercial construction saw its steepest decline in four months.
Civil engineering provided a rare area of growth, posting its first expansion since early 2022.
France saw the sharpest downturn, while Germany remained weak.
Italy was the only country to report an overall rise in construction activity, albeit modest.
New orders continued to decline across the bloc, while cost pressures intensified for the fourth straight month.
Housebuilders down after Gleeson warning, Drax manages gains
On London's equity markets, housebuilders fell after MJ Gleeson issued a downbeat assessment of the UK housing market.
The affordable homebuilder dropped 5.96% after warning that the market "lacks confidence and remains subdued", adding that the board does not expect a near-term catalyst for improvement.
Its cautious outlook dragged down peers, with Barratt Redrow off 2.56%, Berkeley Group down 2.4%, Vistry Group slipping 2.8%, Taylor Wimpey falling 1.45%, and Persimmon losing 1.35%.
Elsewhere, Moonpig Group shed 4.13% after Deutsche Bank downgraded the stock to 'hold' from 'buy' and cut its price target to 235p from 290p, citing limited near-term upside.
On the upside, shares in Drax rose 0.64% as JPMorgan resumed coverage with an 'overweight' rating and a 1,000p price target, citing the company's strong positioning as the UK energy grid becomes more reliant on intermittent sources.
AstraZeneca edged up 0.03% after announcing EU approval for its Imfinzi treatment as the first perioperative immunotherapy for muscle-invasive bladder cancer.
Meanwhile, IT reseller Softcat gained 1.28% after Berenberg upgraded the stock to 'buy' from 'hold', highlighting its operational resilience and recent share price weakness.
Reporting by Josh White for Sharecast.com.
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