(Sharecast News) - London stocks were still a touch higher by midday on Wednesday as investors continued to mull the impact of Trump's trade war, with GSK surging after it lifted its long-term sales guidance and launched a 2bn buyback.
The FTSE 100 was up 0.1% at 8,582.59.
Russ Mould, investment director at AJ Bell, said: "A sense of calm returned to markets after the tariff-related tantrum. Wall Street recorded decent gains last night while Europe held firm this morning.
"The elephant in the room remains China as Donald Trump has not backed down from a trade spat. Retaliation is underway and that's led to the cancellation of a meeting between the two country leaders.
"The decision by the US Postal Service to stop accepting parcels from mainland China and Hong Kong shows the severity of the matter. That's disastrous for big Chinese e-commerce platforms that send goods to the US including Shein and PDD-owned Temu.
"PDD has already seen a share price wobble around tariff fears but bounced back yesterday. Western retailers might secretly welcome the move as it temporarily removes the type of competition that has undercut them on price."
On home shores, a survey showed the services sector faltered in January as costs mounted and nervous clients tightened belts.
The S&P Global UK services PMI business activity index for January came in at 50.8 last month. Although still in positive territory, it was down on December's 51.1 and the joint-lowest print for 15 months. It was also below expectations of 51.2.
A reading below the neutral 50.0 benchmark suggests contraction, while one above it indicates growth.
The survey of around 650 service sector firms also showed a decline in new work, the first since October 2023.
Respondents pointed to cost cutting and heightened risk aversion among corporate clients, as well as investment plans being delayed.
Input price pressures also started to intensify, however, largely due to higher payroll costs, while the pace of job shedding accelerated to its sharpest for four years.
Tim Moore, economics director at S&P Global Market Intelligence, said the data highlighted the "challenging" business environment for service provides, with "stagflation conditions" appearing to take a firmer hold.
He continued: "A renewed downturn in new business volumes added to signs that the near-term UK economic outlook remains tilted to the downside.
"Business activity expectations for the year ahead weakened in response to subdued demand in January, with optimism now at its lowest since December 2022."
In equity markets, pharma giant GSK surged to the top of the FTSE 100 as it missed forecasts slightly with its annual results, but raised its guidance for long-term growth and announced plans to buy back 2bn of stock over the next 18 months. .
Sales in 2024 increased by 3% to 31.38bn, slightly short of the 32bn expected by analysts, while core earnings per share rose 3% to 159.3p, missing the 163.9p consensus estimate.
However, due to progress in its late-stage drug pipeline, GSK upped its 2031 sales outlook to more than 40bn, from 38bn previously.
Precious metals miner Fresnillo shone as gold prices hit a record high and as JPMorgan lifted its price target and said it was its 'top pick' among the EMEA gold miners. Hochschild Mining was also a high riser.
Private housing provider Grainger was in the black as it said net rental income rose 15% year-on-year in the four months to the end of January 2025, driven by strong demand and portfolio growth.
Crest Nicholson was boosted by an upgrade to 'buy' at Investec, while Future was up after the media group said it was on track to achieve full-year market expectations.
On the downside, sales, marketing and support services group DCC lost ground as it said operating profit in its technology segment declined in the third quarter due to a weak market for consumer technology products in the UK and Europe over the holiday season.
Ferrexpo fell again, having tumbled late on Tuesday after it said a civil claim worth 157 billion Ukrainian hryvnia (3bn) had been filed against its Ukrainian unit Ferrexpo Poltava Mining (FPM) in relation to the alleged sale of waste products from the production of iron ore pellets.
Spirax was on the back foot after a downgrade to 'hold' at HSBC, while Raspberry Pi was weaker after a downgrade to 'hold' at Jefferies.
Market Movers
FTSE 100 (UKX) 8,582.59 0.14%
FTSE 250 (MCX) 20,621.66 -0.15%
techMARK (TASX) 4,699.99 0.75%
FTSE 100 - Risers
GSK (GSK) 1,462.50p 5.98%
Fresnillo (FRES) 749.00p 4.98%
Flutter Entertainment (DI) (FLTR) 21,330.00p 2.20%
BT Group (BT.A) 144.25p 1.69%
Auto Trader Group (AUTO) 801.80p 1.67%
Marks & Spencer Group (MKS) 350.50p 1.59%
Tesco (TSCO) 382.60p 1.38%
Beazley (BEZ) 828.50p 1.35%
Entain (ENT) 744.60p 1.33%
Vodafone Group (VOD) 65.80p 1.08%
FTSE 100 - Fallers
DCC (CDI) (DCC) 5,305.00p -3.46%
Croda International (CRDA) 3,124.00p -2.77%
Spirax Group (SPX) 7,745.00p -2.46%
Diageo (DGE) 2,284.00p -1.87%
Convatec Group (CTEC) 235.40p -1.42%
Whitbread (WTB) 2,732.00p -1.37%
JD Sports Fashion (JD.) 83.54p -1.30%
Kingfisher (KGF) 237.80p -1.29%
Diploma (DPLM) 4,498.00p -1.19%
Coca-Cola HBC AG (CDI) (CCH) 2,862.00p -1.11%
FTSE 250 - Risers
Crest Nicholson Holdings (CRST) 170.10p 4.36%
Grainger (GRI) 217.00p 3.83%
Hochschild Mining (HOC) 186.00p 3.68%
Future (FUTR) 961.50p 2.78%
Watches of Switzerland Group (WOSG) 572.00p 2.05%
Trustpilot Group (TRST) 344.50p 1.77%
Deliveroo Class (ROO) 137.50p 1.40%
Endeavour Mining (EDV) 1,687.00p 1.32%
Wizz Air Holdings (WIZZ) 1,249.00p 1.30%
Currys (CURY) 94.00p 1.29%
FTSE 250 - Fallers
Ferrexpo (FXPO) 71.30p -10.88%
Foresight Group Holdings Limited NPV (FSG) 387.00p -3.25%
Pennon Group (PNN) 440.80p -2.69%
Ninety One (N91) 148.70p -2.30%
Softcat (SCT) 1,567.00p -2.25%
Oxford Instruments (OXIG) 2,025.00p -2.17%
Bank of Georgia Group (BGEO) 4,560.00p -2.04%
Senior (SNR) 157.20p -1.75%
Raspberry PI Holdings (RPI) 732.00p -1.68%
Victrex plc (VCT) 977.00p -1.61%
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