FTSE 100 Recovers After Weak Start, Up Marginally

(RTTNews) - After opening on a negative note amid trade tensions and data showing a contraction in the nation's GDP growth in April, U.K. stocks recovered some lost ground on Thursday.

Still, amid uncertainty about China and the U.S. agreeing on a concrete trade deal anytime soon, and lingering concerns about the European Union finalizing a trade deal before the July 8 deadline, the mood in the market remains quite cautious.

Middle East tensions weigh as well. The U.S. President expressed diminished confidence in reaching a nuclear deal with Iran, emphasizing that Iran must not acquire nuclear weapons.

There is more negative news on the geopolitical front, with the U.S. initiating a partial evacuation of its embassy in Iraq and authorizing voluntary departures from Bahrain and Kuwait, citing heightened security concerns.

The benchmark FTSE 100, which dropped to 78,836.75 in early trades, was up 5.85 points or 0.07% at 8,870.20 about an hour past noon.

Travel-related stocks moved lower after weak airfare data from the United States and amid concerns about rising fuel costs.

Halma is rising more than 4%. The health and safety device maker lifted its organic revenue growth guidance for fiscal year 2026 after annual adjusted pretax profit beat expectations.

BT Group and Tesco are up 3% and 2.9%, respectively. Vodafone Group, Endeavour Mining, Segro, Sainsbury (J), GSK, Kingfisher, BP, Hikma Pharmaceuticals, Severn Trent, Fresnillo and Imperial Brands are gaining 1 to 1.8%.

Intermediate Capital Group, Melrose Industries, IAG, EasyJet, Intercontinental Hotels Group, Mondi, Beazley, Rolls-Royce Holdings and Babcock International are down 2.3 to 4.5%.

Hiscox, Standard Chartered, Whitbread, Antofagasta, Prudential, Informa and Weir Group are also notably lower.

The UK economy contracted at the fastest pace in 18 months in April as the end of stamp duty holiday, tax hike on businesses and higher US trade tariffs damped the positive momentum seen at the start of the year.

Real gross domestic product declined 0.3% month-on-month in April, following a growth of 0.2% in March, the Office for National Statistics said. This was the biggest fall since October 2023. GDP was expected to drop marginally by 0.1%.

The production-side of GDP showed that services output posted its first fall since last October. Output contracted 0.4%, offsetting the 0.4% rise in March.

Industrial production decreased 0.6%, which was slightly slower than a 0.7% drop in March. Manufacturing output declined 0.9%, following a 0.8% drop a month ago.

By contrast, construction output grew at a faster pace of 0.9% after rising 0.5% in March.

In the three months to April, the economy expanded 0.7% from the previous three months largely driven by growth in the service sector. Compared to the previous year, GDP advanced 0.9% in April, data showed.