London midday: Stocks maintain gains; Travis Perkins tumbles on results

(Sharecast News) - London stocks were still in the black by midday on Tuesday, recovering from heavy losses in the previous session driven by worries about Trump's tariff threats.

The 100 was up 0.6% at 8,632.12, having closed down 0.9% on Monday.

Kathleen Brooks, research director at XTB, said: "What a difference a day makes, European stocks have bounced at the start of the new quarter and indices are a sea of green.

"The focus is on the US reciprocal tariff announcement that is due tomorrow. At this stage, hopes are that a recovery rally could take hold if Trump's tariff announcements are seen as the final move from the White House in its trade war, and if the new levies are reasonably easy to comply with.

"The downside risk for stocks could emerge once more if Trump suggests that even more tariffs could be coming down the line or if there is a lack of clarity about reciprocal tariffs in the announcement. Markets are hoping for a clean decision, that allows traders to move on from tariffs."

On home shores, a survey showed that output in the manufacturing sector shrank in March, with new orders declining at the fastest pace in 19 months and business confidence slumping to a near two-and-a-half year low.

The S&P Global manufacturing purchasing managers' index fell to a 17-month low of 44.9 from 46.9 in February as rising costs and tariff threats took their toll. Still, it was a touch above the flash estimate of 44.6.

Manufacturing production declined for the fifth month in a row and at the quickest pace since October 2023.

The survey showed that the downturn was widespread, with contractions across all sub-sector definitions - consumer, intermediate and investment goods - and all size categories.

New order intakes fell to the greatest extent since August 2023 and at one of the quickest rates since the pandemic and lockdown-affected months of 2020.

Manufacturers reported a tough trading environment, pointing to rising geopolitical tensions, weak client confidence and economic slowdown in both domestic and overseas markets.

Rob Dobson, director at S&P Global Market Intelligence, said: "Companies are being hit on several fronts. Many reported that domestic market conditions are deteriorating, costs are rising due to changes in the national minimum wage and national insurance contributions, geopolitical tensions are intensifying, and global trade faces potential disruptions from tariffs.

"Although the impact on production volumes was widespread across industry, it was again small manufacturers that took the hardest knock.

"The outlook is also darkening, with overall business optimism plunging to its lowest levels since late-2022. Fears about current and future performance put manufacturers on an increasingly cost cautious footing, with employment, stock holdings and purchasing all falling as companies looked to work leaner and protect cash flow, margins and competitiveness. Many firms are clearly hunkering down as they expect difficulties to continue in the coming months."

Data from Nationwide showed that house prices stagnated in March and are likely to remain "a little soft" in the coming months due to stamp duty changes.

House prices were up 3.9% on the year in March, unchanged on February. On the month, prices were flat, having risen 0.4% in February.

The average price of a home stood at �271,316 last month, versus �270,493 in February.

Robert Gardner, Nationwide's chief economist, said: "These price trends are unsurprising, given the end of the stamp duty holiday at the end of March (transactions associated with mortgage approvals made in March, especially toward the end of the month, would be unlikely to complete before the deadline).

"Indeed, the market is likely to remain a little soft in the coming months since activity will have been brought forward to avoid the additional tax obligations - a pattern typically observed in the wake of the end of stamp duty holidays.

"Nevertheless, activity is likely to pick up steadily as the summer progresses, despite wider economic uncertainties in the global economy, since underlying conditions for potential home buyers in the UK remain supportive."

Investors were also mulling the latest data from the British Retail Consortium, which showed that shop prices slipped in March as retailers held back from hiking rates.

In equity markets, Spire Healthcare advanced after saying it had bought Acorn Occupational Health for �3.3m.

Irish convenience food manufacturer Greencore surged as it lifted its full-year profit outlook following a strong second quarter.

AJ Bell and IntegraFin both gained after upgrades to 'buy' at Deutsche Bank.

On the downside, supermarkets Sainsbury's and Tesco were in the red as the latest data from Kantar showed that annual sales growth at grocery stores slowed to its lowest rate in 10 months in March as promotional activity picked up.

Take-home sales across the grocery sector rose by just 1.8% over the four weeks to 23 March when compared with last year, compared with 3.6% growth seen the previous month.

Sainsbury's was also knocked lower by a downgrade to 'neutral' at BNPP Exane.

Travis Perkins tanked as the builders' merchant said it barely broke even in 2024 on the back of falling volumes and prices and an underperforming merchanting business, with the bottom line weighed down further by �139m in impairment charges.

Market Movers

FTSE 100 (UKX) 8,632.12 0.57%

FTSE 250 (MCX) 19,625.77 0.77%

techMARK (TASX) 4,641.02 0.73%

FTSE 100 - Risers

Rentokil Initial (RTO) 358.20p 3.05%

Kingfisher (KGF) 260.10p 2.68%

Games Workshop Group (GAW) 14,290.00p 2.14%

Halma (HLMA) 2,636.00p 2.13%

Glencore (GLEN) 286.15p 2.09%

easyJet (EZJ) 451.00p 1.97%

Rightmove (RMV) 698.60p 1.90%

Rolls-Royce Holdings (RR.) 763.00p 1.87%

GSK (GSK) 1,488.50p 1.81%

Barclays (BARC) 293.00p 1.81%

FTSE 100 - Fallers

Sainsbury (J) (SBRY) 227.40p -3.32%

Tesco (TSCO) 326.50p -1.75%

WPP (WPP) 576.40p -0.83%

Aviva (AV.) 551.40p -0.68%

Anglo American (AAL) 2,130.50p -0.68%

Imperial Brands (IMB) 2,846.00p -0.66%

National Grid (NG.) 1,003.00p -0.64%

Shell (SHEL) 2,807.00p -0.64%

Informa (INF) 764.80p -0.60%

Smith & Nephew (SN.) 1,079.00p -0.55%

FTSE 250 - Risers

PPHE Hotel Group Ltd (PPH) 1,264.00p 5.77%

B&M European Value Retail S.A. (DI) (BME) 271.40p 4.22%

QinetiQ Group (QQ.) 397.40p 2.90%

Kainos Group (KNOS) 682.50p 2.79%

Auction Technology Group (ATG) 597.00p 2.75%

Marshalls (MSLH) 251.50p 2.65%

International Workplace Group (IWG) 185.20p 2.49%

Raspberry PI Holdings (RPI) 478.20p 2.49%

Softcat (SCT) 1,619.00p 2.40%

Me Group International (MEGP) 196.80p 2.39%

FTSE 250 - Fallers

Travis Perkins (TPK) 511.00p -7.09%

THG (THG) 31.60p -2.41%

Petershill Partners (PHLL) 234.00p -1.47%

Close Brothers Group (CBG) 274.60p -1.29%

Burberry Group (BRBY) 762.60p -1.19%

Playtech (PTEC) 689.00p -1.15%

Telecom Plus (TEP) 1,722.00p -1.03%

Bakkavor Group (BAKK) 176.20p -1.01%

JPMorgan Indian Investment Trust (JII) 970.00p -0.92%

AO World (AO.) 95.30p -0.73%