The FTSE 100 outperformed its European counterparts by some margin on Thursday, as strong results from Tesco and Halma and stronger oil prices helped support the index.
Global trade was again at the top of the list of things causing investors concern on Thursday after a US/China trade deal left many trade restrictions in place, threatening global growth.
Other countries will be concerned that they also come away with a trade deal that leaves them vulnerable and that’s being reflected in European stocks on Thursday. The German DAX fell more than 1% while the French CAC lost 0.4%.
“There’s more of a downbeat mood in play as tariffs are once again the talk of the town and countries brace for punishment if they don’t play ball with the US,” said Matt Britzman, senior equity analyst, Hargreaves Lansdown.
“The Trump/Bessent good cop–bad cop routine is in full swing. Trump is saying nations can ‘take it or leave it’ when it comes to tariff deals on offer. But Treasury Secretary Scott Bessent is offering a carrot in the form of potential extensions to the 90-day pause on reciprocal tariffs for those willing to negotiate. Markets have reacted badly nonetheless, and there’s a sea of red across Europe this morning, but the FTSE 100 is escaping the worst for now.”
The FTSE 100’s outperformance on Thursday is yet another example of its resilience as the index shrugged off poor UK GDP figures.
Following the release of disappointing UK jobs data and retail sales earlier this week, investors were provided with a more comprehensive, but equally disappointing, assessment of the economy in the form of 0.3% contraction in UK GDP in April.
“It’s hard not to look at today’s headline fall in economic growth as anything other than inevitable,” said Danni Hewson, AJ Bell head of financial analysis.
“Company after company had warned the chancellor that the decisions taken during last year’s Budget would impact business growth and create huge uncertainty about existing staffing levels.
“The latest jobs figures highlighted the fall in payrolled employees and rising unemployment earlier this week, and all those bill rises in April delivered another knock to consumer confidence, with the latest BRC retail sales figures showing spending on big ticket items has been reigned back.”
Donald Trump’s tariffs also played a major part in the slowdown, with exports dropping sharply.
Thankfully, there were plenty of good news stories for FTSE 100 companies to provide support for the index on Thursday.
Halma was the FTSE 100 top riser, jumping over 5%, after the company issued upbeat results, including an 11% increase in revenue.
“Health, safety and environmental solutions group Halma confirmed its status as one of the unsung heroes of the London market with its latest set of impressive results as revenue reached record levels,” said AJ Bell’s Russ Mould.
“The company is not resting on its laurels with strong cash flow being reinvested into the business to support future growth.”
Tesco shares were also higher as group like-for-like sales rose 4.6% despite the ongoing price war with the discounters.
“Britain’s largest grocer has delivered a resilient performance, despite a price war initiated by Asda and waning consumer confidence,” said Garry White, Chief Investment Commentator at Charles Stanley.
“Tesco reported a modest rise in UK like-for-like sales in its first-quarter update, during which it continued to gain market share. This was supported by its Aldi Price Match and Clubcard Prices initiatives, which helped retain cost-conscious shoppers amid ongoing inflationary pressures.”
BP and Shell provide the most support to the FTSE 100 index in terms of points as oil prices rose.