London close: Stocks manage gains despite trade concerns

(Sharecast News) - London stocks ended marginally higher on Monday, with investors weighing a series of UK and global economic data releases and monitoring escalating trade tensions between the US and China.

The FTSE 100 index edged up 0.02% to close at 8,774.26 points, while the FTSE 250 rose just 0.005% to finish at 21,028.97.

In currency markets, sterling gained 0.59% on the dollar to trade at $1.3539, while it slipped 0.1% against the euro, changing hands at �1.1848.

"The decline in the ISM PMI figure today might point the way to how data will turn out in the weeks to come," said IG chief market analyst Chris Beauchamp.

"The problem for investors is that it's hard to know if the tariff pauses and deals we have seen will help to repair any poor figures.

"Data from March and April were dismissed as being too early to provide an insight into the US economy, but from the looks of the market reaction it seems that May's data might get ignored too."

Beauchamp said that for investors that piled out of US stocks in April, the big question was whether they could continue to "remain aloof" from the continued rally, or be dragged back in again, if only at a cautious pace.

"If they are, then this market might yet surprise everyone by continuing to rebound in coming weeks."

UK manufacturing still in contraction, house prices edge up

In economic news, UK manufacturing remained in contraction during May, though there were early signs of improvement.

The S&P Global UK manufacturing purchasing managers' index (PMI) rose to 46.4, a three-month high, up from 45.4 in April and above the flash estimate of 45.1.

Despite stronger output and new order trends, the sector was weighed down by weak client confidence, higher input costs following recent tax changes, and ongoing trade uncertainty.

New business volumes fell for an eighth consecutive month, although the pace of decline eased.

"UK manufacturing faces many challenges, including the turbulent market conditions, trade uncertainties, low client confidence and rising tax-related wage costs," said Rob Dobson, director at S&P Global Market Intelligence.

"Smaller manufacturers are experiencing the sharpest pinch, registering the steepest retrenchments in output and demand and seeing their confidence slump to a near record low.

"There are some signs of manufacturing turning a corner ... [but] trading conditions remain turbulent both at home and abroad."

In the housing market, Nationwide reported that UK house prices edged up in May despite broader economic concerns.

Annual growth reached 3.5%, slightly above April's 3.4%, while monthly prices rose 0.5% to an average of �273,427.

However, mortgage approvals dropped sharply in April, with Bank of England data showing a fall to 60,500, down from 63,600 in March and below expectations.

The decline followed a rush to complete purchases ahead of April's stamp duty threshold changes, while net mortgage borrowing also swung to negative territory.

"Official data confirmed that there was a significant jump in residential property transactions in March, with buyers bringing forward their purchases to avoid additional stamp duty costs," said Nationwide chief economist Robert Gardner .

"Owner occupier house purchase completions were around twice as high as usual and the highest since June 2021 - which was also impacted by stamp duty changes."

Across Europe, manufacturing activity showed signs of bottoming out.

The final eurozone manufacturing PMI came in at 49.4 for May, unchanged from the flash estimate and up from 49.0 in April.

Though still below the 50.0 mark that separates growth from contraction, it was the highest level since August 2022.

Output rose for a third month and business confidence reached its strongest level since early 2022.

National data pointed to gains in Spain and France, while German conditions remained soft but improved.

In China, official data showed a modest recovery in manufacturing amid easing trade tensions with the US.

The manufacturing PMI rose to 49.5 in May from 49.0 in April.

While still in contraction, output returned to expansion at 50.7, and the pace of decline in new and export orders slowed, suggesting tentative signs of stability in the sector.

Babcock leads defence stocks higher, Raspberry Pi in the red

In economic news, shares in Babcock International surged 7.26% after the UK government confirmed plans to build up to 12 nuclear-powered attack submarines under the AUKUS pact.

QinetiQ gained 4.79% and BAE Systems edged up 0.29%, though Rolls-Royce dipped 0.25%, after all were in the green after the news broke during the morning.

Analysts cited growing investor interest in the sector amid a supportive long-term outlook for defence spending.

Gold and silver miners also advanced, with Fresnillo up 6.19% and Endeavour Mining rising 5.86% as precious metal prices strengthened.

Aberdeen Group climbed 3.23% following a Goldman Sachs upgrade to 'buy', with the broker arguing the market has overly focused on the firm's underperforming asset management division.

Vodafone inched 0.05% higher after it and CK Hutchison confirmed the completion of the long-awaited merger between Vodafone UK and Three UK.

Anglo American added 0.68% after finalising the spin-off of its Valterra Platinum business, which debuted in London with Anglo retaining a 19.9% stake.

The move marked a shift in strategic focus toward its copper, iron ore and fertiliser operations.

On the downside, Raspberry Pi Holdings dropped 7.13% amid renewed US-China trade tensions, which weighed on sentiment toward companies with significant exposure to global supply chains.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,774.26 0.02%

FTSE 250 (MCX) 21,028.97 0.00%

techMARK (TASX) 4,865.62 -0.01%

FTSE 100 - Risers

Babcock International Group (BAB) 1,013.00p 8.23%

Fresnillo (FRES) 1,233.00p 6.02%

Rentokil Initial (RTO) 363.20p 3.30%

International Consolidated Airlines Group SA (CDI) (IAG) 335.30p 2.82%

Legal & General Group (LGEN) 254.10p 2.17%

Antofagasta (ANTO) 1,805.00p 1.95%

Phoenix Group Holdings (PHNX) 644.50p 1.66%

Schroders (SDR) 361.20p 1.63%

Marks & Spencer Group (MKS) 380.30p 1.58%

Imperial Brands (IMB) 2,847.00p 1.32%

FTSE 100 - Fallers

Anglo American (AAL) 2,220.00p -11.33%

Ashtead Group (AHT) 4,158.00p -4.08%

WPP (WPP) 582.20p -2.87%

Flutter Entertainment (DI) (FLTR) 18,210.00p -2.85%

Taylor Wimpey (TW.) 116.95p -2.17%

Smurfit Westrock (DI) (SWR) 3,124.00p -2.07%

JD Sports Fashion (JD.) 82.56p -1.85%

Spirax Group (SPX) 5,610.00p -1.84%

Diploma (DPLM) 4,612.00p -1.58%

IMI (IMI) 1,957.00p -1.56%

FTSE 250 - Risers

THG (THG) 26.68p 9.88%

Endeavour Mining (EDV) 2,406.00p 6.84%

Mobico Group (MCG) 31.86p 6.56%

Spire Healthcare Group (SPI) 204.00p 5.37%

QinetiQ Group (QQ.) 519.50p 4.49%

Foresight Group Holdings Limited NPV (FSG) 398.00p 4.46%

Abrdn (ABDN) 180.80p 4.15%

Hochschild Mining (HOC) 284.20p 3.57%

CMC Markets (CMCX) 289.50p 3.21%

International Public Partnerships Ltd. (INPP) 119.20p 2.94%

FTSE 250 - Fallers

Raspberry PI Holdings (RPI) 477.00p -8.88%

Ferrexpo (FXPO) 51.50p -4.63%

Coats Group (COA) 75.70p -3.93%

Ocado Group (OCDO) 253.10p -3.84%

4Imprint Group (FOUR) 3,440.00p -3.10%

Indivior (INDV) 916.00p -3.02%

JTC (JTC) 813.00p -2.87%

Watches of Switzerland Group (WOSG) 416.80p -2.84%

Playtech (PTEC) 309.50p -2.52%

RS Group (RS1) 555.50p -2.46%