Source: Sharecast
The FTSE 100 index rose 0.28% to close at 8,785.33 points, while the FTSE 250 gained 0.54% to finish at 21,743.16 points.
In currency markets, sterling was last down 0.12% on the dollar to trade at $1.3715, while it edged up 0.07% against the euro, changing hands at €1.1659.
“There is a mild risk off tone to markets on Tuesday as the focus swings back to trade deals as we get close to the 9 July deadline to forge trade agreements with the US,” said Kathleen Brooks, research director at XTB.
“Fears are mounting that the UK and China are the only countries with agreements in place.”
Brooks said the rally in US, Asian and some European indices in the last three months had been driven by hopes that Trump would perform his usual ‘TACO’ - or ‘Trump Always Chickens Out’ - and cave in at the last minute.
“If he doesn’t do this or if he doesn’t kick the can down the road, then the stock market rally could come to an abrupt halt.”
UK house prices fall as shop price inflation returns
In economic news, UK house prices fell unexpectedly in June, according to data from Nationwide.
Prices declined 0.8% on the month, reversing May’s 0.4% increase and missing forecasts of a 0.2% rise.
Annual house price growth slowed to 2.1% from 3.5%, with the average home now costing £271,619.
“The softening in price growth may reflect weaker demand following the increase in stamp duty at the start of April,” said Nationwide chief economist Robert Gardner.
“Nevertheless, we still expect activity to pick up as the summer progresses, despite ongoing economic uncertainties in the global economy, since underlying conditions for potential homebuyers in the UK remain supportive.
“The unemployment rate remains low, earnings are rising at a healthy pace in real terms - after accounting for inflation - household balance sheets are strong and borrowing costs are likely to moderate a little if Bank Rate is lowered further in the coming quarters as we and most other analysts expect.”
Meanwhile, shop price inflation returned for the first time in nearly a year, driven by a sharp rise in food prices.
The British Retail Consortium reported that overall shop prices were 0.4% higher than a year earlier, after a 0.1% decline in May.
Food inflation surged to 3.7% from 2.8%, fuelled by higher wholesale costs, wage pressures, and poor harvests, while non-food deflation eased slightly to -1.2%.
“Retailers have warned of higher prices for consumers since last year’s Autumn Budget and the huge rises to employer National Insurance costs and the National Living Wage,” said BRC chief executive Helen Dickinson.
“We predicted a significant rise in food inflation by the end of this year, and this has been accelerated by geopolitical tensions and impacts of climate change.
“To limit further rises, the Government must find ways to alleviate the cost pressures bearing down on retailers.”
The downturn in UK manufacturing meanwhile softened in June, as the S&P Global manufacturing purchasing managers' index (PMI) rose to 47.7, the highest in five months but still below the 50 threshold that signals growth.
Output, new orders and employment continued to fall but at a slower pace, while business optimism hit a four-month high.
Rob Dobson, director at S&P Global Market Intelligence, said the PMI survey provided “signs of conditions stabilising”.
“The orders-to-inventory ratio, a reliable bellwether of future production trends, also climbed sharply to its highest since August 2024,” he said.
“Inflation of both input costs and selling prices meanwhile nudged lower to hint at a softening inflation trend.”
In the eurozone, manufacturing confidence improved despite slowing output.
The HCOB manufacturing PMI rose to 49.5 in June from 49.4 in May, the highest since February 2022.
Output growth softened, but new orders stabilised for the first time in over three years, marking a potential turning point for the sector.
US manufacturing also remained in contraction, but the pace of decline eased.
The ISM manufacturing PMI edged up to 49.0 in June from 48.5 in May.
Tariff uncertainty continued to weigh on activity, although some industries reported additional pressures from geopolitical tensions.
Despite the manufacturing weakness, the US labour market showed resilience.
Job openings rose by 5.1% in May to 7.77 million, beating expectations.
The quits rate also ticked higher to 2.1%, indicating continued worker confidence, although hiring slipped by 1.7%.
China’s manufacturing sector returned to growth in June, according to Caixin’s PMI, which rose to 50.4 from 48.3 in May.
Domestic demand improved slightly, supported by better trade conditions and promotional activity, though export orders continued to fall for a third consecutive month.
Housebuilders fall on Nationwide data, miners rally
On London’s equity markets, housebuilders were lower after the data from Nationwide showed an unexpected drop in UK house prices in June.
Barratt Redrow fell 2.43% and Taylor Wimpey lost 1.88%, as the figures weighed on the sector.
Standard Chartered declined 1.91% after reports emerged that the bank faced a $2.7bn lawsuit from liquidators alleging it facilitated the laundering of funds misappropriated from Malaysia's 1MDB sovereign wealth fund.
J Sainsbury slipped 1.91%, giving up earlier gains despite reaffirming its full-year profit guidance and reporting a strong rise in first-quarter like-for-like sales, driven by demand for its premium 'Taste the Difference' range.
On the upside, mining stocks outperformed, with Glencore up 2.27%, Antofagasta gaining 1.24%, and Anglo American rising 0.56%, supported by firmer commodity prices.
National Grid and SSE advanced 0.61% and 0.57%, respectively, after Ofgem approved a £24bn investment package to bolster energy security and support the clean energy transition, with substantial funding allocated to both firms.
B&M European Value Retail was the top riser, jumping 5.92% on the back of a note from analysts at RBC.
Reporting by Josh White for Sharecast.com.
Market Movers
FTSE 100 (UKX) 8,785.33 0.28%
FTSE 250 (MCX) 21,743.16 0.54%
techMARK (TASX) 5,094.63 0.38%
FTSE 100 - Risers
Smurfit Westrock (DI) (SWR) 3,325.00p 5.82%
Diageo (DGE) 1,896.50p 3.75%
Whitbread (WTB) 2,918.00p 3.37%
JD Sports Fashion (JD.) 91.30p 2.88%
AstraZeneca (AZN) 10,402.00p 2.79%
Glencore (GLEN) 291.25p 2.70%
Vodafone Group (VOD) 79.68p 2.44%
Compass Group (CPG) 2,527.00p 2.43%
WPP (WPP) 523.80p 2.18%
CRH (CDI) (CRH) 6,856.00p 2.15%
FTSE 100 - Fallers
Convatec Group (CTEC) 272.00p -5.69%
Rolls-Royce Holdings (RR.) 939.60p -2.89%
Babcock International Group (BAB) 1,119.00p -2.53%
Barclays (BARC) 329.70p -2.25%
Standard Chartered (STAN) 1,182.00p -2.07%
Melrose Industries (MRO) 520.00p -2.03%
NATWEST GROUP (NWG) 501.40p -1.96%
The Sage Group (SGE) 1,230.50p -1.60%
Beazley (BEZ) 922.50p -1.34%
British American Tobacco (BATS) 3,418.00p -1.30%
FTSE 250 - Risers
B&M European Value Retail S.A. (DI) (BME) 287.50p 5.93%
Ocado Group (OCDO) 241.50p 5.91%
Hochschild Mining (HOC) 269.20p 5.32%
Ibstock (IBST) 151.00p 3.28%
Apax Global Alpha Limited (APAX) 128.00p 3.06%
Harworth Group (HWG) 185.50p 3.06%
Carnival (CCL) 1,884.00p 3.01%
Johnson Matthey (JMAT) 1,787.00p 2.94%
Greggs (GRG) 1,969.00p 2.92%
Endeavour Mining (EDV) 2,292.00p 2.87%
FTSE 250 - Fallers
XPS Pensions Group (XPS) 365.00p -4.82%
Lion Finance Group (BGEO) 6,920.00p -2.26%
QinetiQ Group (QQ.) 504.50p -2.13%
Bloomsbury Publishing (BMY) 502.00p -1.95%
Diversified Energy Company (DEC) 1,063.00p -1.94%
Trustpilot Group (TRST) 237.00p -1.90%
Bellway (BWY) 2,838.00p -1.60%
Wizz Air Holdings (WIZZ) 1,068.00p -1.56%
Morgan Sindall Group (MGNS) 4,505.00p -1.53%
Ithaca Energy (ITH) 155.20p -1.52%