(Sharecast News) - London stocks ticked a touch higher in early trade on Monday as defence firms gained.
At 0840 BST, the FTSE 100 was up 0.1% at 8,807.18.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "Exuberance is set to continue at the start of the week, as more trade deal scores are on the doors and geopolitical tensions have eased off.
"The FTSE 100 has nudged higher in early trade, edging back on track towards highs reached earlier this year. Positivity has been washing through Wall Street, with stocks looking set to book fresh record levels. It comes after the S&P 500 reached a fresh milestone on Friday. Investors have shaken off tariff fears, with the deepest threats from Trump failing to materialise.
"Talks between Canada and the US are back on the cards, after an agreement to scrap a tax targeting American tech firms. Mark Carney appears to have acquiesced to Tump's demands to drop the digital services levy, to get back round the table and avoid another trade threat escalation. Bit by bit, Trump's hardline negotiating tactics appear to be bearing fruit.
"There will now be speculation that other countries, like the UK, will be forced to drop their own taxes targeting the biggest tech firms in the world when further talks take place."
On the macro front, data released earlier by the Office for National Statistics showed the economy grew 0.7% in the first three months of the year, confirming a preliminary estimate released in May.
Growth was driven by a 0.7% increase in the services sector, while production also grew, by 1.3%, and the construction sector saw 0.3% growth.
ONS director of economic statistics Liz McKeown said: "While overall quarterly growth was unrevised, our updated set of figures show the economy still grew strongly in February, with growth now coming in a little higher in March too.
"There was broad based growth across services, while manufacturing also had a strong quarter.
"The saving ratio fell for the first time in two years this quarter, as rising costs for items such as fuel, rent and restaurant meals contributed to higher spending, although it remains relatively strong."
Investors were also mulling the latest growth indicator from the Confederation of British Industry, which showed that UK companies remain deeply uncertain about their near-term growth prospects as they continue to battle higher costs and global headwinds.
The CBI said the balance of private sector companies expecting activity to fall in the three months to September was -18.
The print was an improvement on May's low of -30. But it remains firmly in negative territory.
A balance is the weighted percentage of companies reporting an increase minus those reporting a decrease.
Business volumes were forecast to slide in the retail and wholesale sectors, with the -40 balance the weakest since September 2022.
Business and professional services also forecast a fall, with a balance of -10, as did consumer services, at -31. Overall, the service sector had a balance of -14.
Alpesh Paleja, CBI deputy chief economist, said: "While negative expectations for activity have eased a little, our surveys still point to challenging conditions for businesses.
"Firms cite a very mixed picture on activity. While there are pockets of strength in the economy, it's clear that sizeable headwinds to growth remain.
"Companies are still grappling with higher employment costs, cautious spending behaviour on the part of households, and increasing global uncertainty.
"The recent volatility in global oil prices is also one to keep an eye on, given its scoop to exacerbate costs and inflationary pressure."
In equity markets, defence firms were among the top gainers, with Babcock, Rolls-Royce and BAE Systems all higher.
Chemring advanced after announcing the acquisition of Hampshire-based software-defined radio systems manufacturer Landguard Nexus in a deal worth as much as 20m.
Water company Pennon rallied after an upgrade to 'buy' at Deutsche Bank.
On the downside, British Gas owner Centrica was knocked lower by a downgrade to 'neutral' from 'overweight' at JPMorgan.
WH Smith tumbled after it sold its high street business for 12m less than expected following a period of "softer trading".
Market Movers
FTSE 100 (UKX) 8,807.18 0.09%
FTSE 250 (MCX) 21,707.00 -0.04%
techMARK (TASX) 5,089.43 -0.05%
FTSE 100 - Risers
Babcock International Group (BAB) 1,163.00p 2.29%
Rolls-Royce Holdings (RR.) 972.00p 1.87%
Fresnillo (FRES) 1,450.00p 1.19%
Imperial Brands (IMB) 2,854.00p 1.06%
Auto Trader Group (AUTO) 829.40p 1.00%
BAE Systems (BA.) 1,880.00p 0.97%
British American Tobacco (BATS) 3,461.00p 0.90%
Admiral Group (ADM) 3,286.00p 0.86%
Glencore (GLEN) 288.95p 0.78%
Melrose Industries (MRO) 540.20p 0.78%
FTSE 100 - Fallers
Centrica (CNA) 160.35p -1.93%
Intermediate Capital Group (ICG) 1,980.00p -1.59%
Croda International (CRDA) 2,979.00p -1.29%
GSK (GSK) 1,388.00p -1.25%
Experian (EXPN) 3,809.00p -1.24%
JD Sports Fashion (JD.) 86.84p -1.18%
Smurfit Westrock (DI) (SWR) 3,135.00p -1.01%
easyJet (EZJ) 527.60p -0.90%
Mondi (MNDI) 1,203.50p -0.66%
CRH (CDI) (CRH) 6,652.00p -0.60%
FTSE 250 - Risers
Trainline (TRN) 291.00p 4.30%
Indivior (INDV) 1,008.00p 2.23%
Foresight Group Holdings Limited NPV (FSG) 432.00p 1.89%
Endeavour Mining (EDV) 2,210.00p 1.56%
Energean (ENOG) 913.50p 1.50%
AVI Global Trust (AGT) 241.50p 1.47%
Alpha Group International (ALPH) 3,217.50p 1.34%
Chemring Group (CHG) 563.00p 1.26%
Carnival (CCL) 1,804.00p 1.23%
Tritax Big Box Reit (BBOX) 149.80p 1.15%
FTSE 250 - Fallers
WH Smith (SMWH) 1,048.00p -7.17%
Breedon Group (BREE) 380.20p -2.71%
Ibstock (IBST) 148.00p -2.63%
Spire Healthcare Group (SPI) 220.00p -2.44%
FirstGroup (FGP) 226.00p -2.25%
Man Group (EMG) 173.40p -2.20%
Hill and Smith (HILS) 1,770.00p -1.88%
Wizz Air Holdings (WIZZ) 1,089.00p -1.80%
Pagegroup (PAGE) 267.00p -1.26%
HarbourVest Global Private Equity Limited A Shs (HVPE) 2,510.00p -1.18%
27.27 (0.31%)
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