London close: FTSE rises on hopes for UK-US trade deal

(Sharecast News) - London stocks ended mixed on Friday as optimism over a potential UK-US trade deal helped to boost the top-flight index.

The FTSE 100 index advanced 0.61% to close at 8,809.74 points, while the FTSE 250 slipped 0.43% to 20,326.38 points.

In currency markets, sterling was last up 0.01% on the dollar to trade at $1.2602, while it weakened 0.08% against the euro, changing hands at �1.2108.

"Despite US stock indices regaining some lost ground on Friday, they saw a second straight negative week while the US dollar appreciated amid US president [Donald] Trump's renewed tariff threats and a worsening US economic outlook," said IG senior technical analyst Axel Rudolph.

"The Nasdaq dropped by over 7% from last week's record high and booked its worst month since 2023.

"US PCE inflation in line with expectations, personal income soaring the most in one year and personal spending falling for the first time in almost two years played second fiddle to president Trump's tariff threats."

Rudolph noted that most commodity prices slid on the last day of the month, as the dollar appreciated on safe haven flows triggered by the renewed tariff threats.

"Tuesday 4 March is crunch day when it'll become clear whether the US president bluffed once more or is going to go ahead with up to 25% tariffs on his neighbours Canada and Mexico."

UK-US trade deal hopes strengthen, UK house prices rise

At the top of the economic agenda were strengthening hopes for a UK-US trade deal, after US president Donald Trump signaled that additional tariffs on trans-Atlantic exports might not be necessary if an agreement was reached.

Speaking at the White House following discussions with UK prime minister Keir Starmer, Trump said negotiations could be concluded "very quickly" and described Starmer as a "tough negotiator".

The US president, who had previously threatened a 25% tariff on EU exports, suggested that the UK's trade position could be resolved, calling a deal "terrific for both countries".

"Kier Starmer's appearance in the White House appears to have gone as well as it could, with the president seemingly open to a favourable trade deal that will avoid tariffs on UK exports to the US," said Joshua Mahony, chief market analyst at Scope Markets.

"This should come to no surprise given the trade deficit the UK currently holds with the US, standing in stark contrast to the surplus enjoyed by the European Union."

In the UK housing market, property prices rose more than expected in February, with lender Nationwide reporting a 0.4% monthly increase, ahead of forecasts for a 0.2% rise.

On an annual basis, prices grew 3.9%, slightly slower than January's 4.1% increase.

The average UK house price climbed to �270,493 from �268,213 in the previous month.

Nationwide chief economist Robert Gardner said housing market activity had remained resilient in recent months, despite ongoing affordability challenges.

"Indeed, the second half of 2024 saw a noticeable pick up in total housing transactions, which were up 14% compared with the same period in 2023," he said.

"However, taking 2024 as a whole, transactions were still modestly (6%) lower than the levels prevailing before the pandemic struck in 2019.

"In terms of the pattern of transactions, it is notable that first-time buyer activity continued to recover, with mortgage completions in 2024 just 5% below 2019 levels."

In Europe, German inflation remained higher than expected at 2.8% in February, unchanged from January and exceeding the 2.7% estimate.

Core inflation, which excludes volatile food and energy prices, eased to 2.6% from 2.9%.

Meanwhile, German retail sales rebounded 0.2% in January, beating expectations for a flat reading, while employment data showed the number of unemployed people increased by 5,000 to 2.989 million, the highest level since August 2020.

Despite the rise, the increase was smaller than the 15,000 forecast by economists.

France's inflation rate meanwhile dropped below 1% for the first time in four years, fueling expectations of further European Central Bank rate cuts.

The consumer price index rose just 0.8% in February, down from 1.7% in January and well below the 1.2% estimate.

Harmonised inflation, which aligns with eurozone comparisons, fell to 0.9% from 1.8%.

Across the Atlantic, US personal consumption expenditures - the Federal Reserve's preferred inflation measure - eased to 2.5% annually in January from 2.6% in December.

Core inflation slowed to 2.6% from 2.9%, in line with expectations.

Personal spending declined 0.2% month-on-month, while income rose 0.9%.

IMI rises on record profits, Morgan Advanced Materials slides

On London's equity markets, IMI climbed 5.48% after reporting record full-year profits and announcing a �200m share buyback.

Weir Group gained 5.89% following its earnings release, where it struck an optimistic tone on its outlook and confirmed the �657m acquisition of mining software firm Micromine.

International Consolidated Airlines Group rose 3.66% after posting a better-than-expected annual profit increase, with adjusted operating profit jumping 26% to �4.4bn, surpassing forecasts.

The British Airways owner also announced plans to return �1bn to shareholders.

Education publisher Pearson added 1.95% as it reported a 10% rise in annual profit and launched a �350m share buyback.

Rightmove advanced 3.61% after lifting its dividend alongside a rise in full-year revenue and operating profit, as housing market activity showed signs of improvement.

Tritax Big Box gained 1.81% after reporting a 24.3% surge in rental income and a 30.2% increase in portfolio value, with earnings per share soaring 428.8% to 19.67p.

On the downside, Morgan Advanced Materials plummeted 16.21% after warning of uncertain demand across several markets.

The company said it expected a mid-single-digit organic revenue decline in 2025 and did not anticipate a recovery in the second half of the year.

Me Group International dropped 12.64% as Montefiore Investment offloaded 26.5 million shares, equivalent to 7% of the company's issued share capital, through an accelerated bookbuild.

Smurfit Westrock fell 2.61% after the packaging firm announced the resignation of board member and non-executive director Dmitri Stockton.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,809.74 0.61%

FTSE 250 (MCX) 20,326.38 -0.43%

techMARK (TASX) 4,762.32 0.45%

FTSE 100 - Risers

Weir Group (WEIR) 2,430.00p 6.30%

IMI (IMI) 2,002.00p 5.81%

Persimmon (PSN) 1,205.00p 4.74%

Rightmove (RMV) 671.00p 4.32%

Haleon (HLN) 398.40p 4.18%

International Consolidated Airlines Group SA (CDI) (IAG) 352.30p 4.02%

Barclays (BARC) 311.30p 3.40%

Melrose Industries (MRO) 641.00p 3.02%

SSE (SSE) 1,528.00p 2.55%

HSBC Holdings (HSBA) 933.60p 2.33%

FTSE 100 - Fallers

St James's Place (STJ) 1,058.00p -3.64%

Smurfit Westrock (DI) (SWR) 4,104.00p -2.61%

Antofagasta (ANTO) 1,733.50p -2.45%

Scottish Mortgage Inv Trust (SMT) 1,042.50p -2.21%

Land Securities Group (LAND) 564.50p -2.00%

JD Sports Fashion (JD.) 78.06p -1.61%

Coca-Cola HBC AG (CDI) (CCH) 3,360.00p -1.47%

3i Group (III) 3,957.00p -1.22%

Fresnillo (FRES) 742.50p -1.20%

Anglo American (AAL) 2,336.00p -1.14%

FTSE 250 - Risers

Genus (GNS) 1,842.00p 5.26%

Oxford Nanopore Technologies (ONT) 112.60p 3.40%

Wood Group (John) (WG.) 37.08p 3.29%

PRS Reit (The) (PRSR) 112.60p 2.68%

Crest Nicholson Holdings (CRST) 157.30p 2.61%

Tritax Big Box Reit (BBOX) 147.30p 2.51%

Primary Health Properties (PHP) 92.40p 2.40%

Lancashire Holdings Limited (LRE) 618.00p 2.32%

Vistry Group (VTY) 612.50p 2.08%

NCC Group (NCC) 130.40p 2.03%

FTSE 250 - Fallers

Morgan Advanced Materials (MGAM) 214.50p -16.21%

Me Group International (MEGP) 192.20p -12.64%

Ocado Group (OCDO) 259.80p -4.84%

RHI Magnesita N.V. (DI) (RHIM) 3,330.00p -4.17%

Dr. Martens (DOCS) 65.65p -4.16%

AO World (AO.) 96.80p -3.78%

Allianz Technology Trust (ATT) 400.50p -3.49%

Rathbones Group (RAT) 1,648.00p -3.25%

JPMorgan Indian Investment Trust (JII) 922.00p -3.21%

Hilton Food Group (HFG) 855.00p -3.17%