- FTSE 100 climbs 81 points to 8,409
- Follows President Trump walking back on China
- UK public sector borrowing highest since 1960s
- Updates from Babcock, Croda, Reckitt, Fresnillo, THG
4.01pm: FTSE gains chipped away
The FTSE 100 is seeing its gains chipped away as Wednesday's session winds its way towards the close.
With just over half an hour to go, the London index is heading towards an increase of just under 1%, down from over 1.5% in the morning.
Topping the leaderboard is Croda International PLC (LSE:CRDA) as the chemicals group reported an encouraging start to 2025 after a tough previous year, with sales 3% above the City consensus.
Miners such as Antofagasta and Anglo American, along with China-focused lenders Standard Chartered PLC (LSE:STAN) and HSBC Holdings PLC (LSE:HSBA), were next, up between 6% and 3% after conciliatory remarks from Donald Trump on Chinese tariffs.
The index tailed off from earlier highs as gains for oil giants Shell and BP were trimmed as oil prices went back into reverse.
Brent prices and gold dropped sharply amid what analyst Axel Rudolph at IG says is profit-taking. "Interestingly enough, the price of silver rose significantly as the gold/silver spread swiftly came off this week' 5-year high," he adds.
Babcock International PLC (LSE:BAB) shares rose 4%, coming close to a seven-year high as the defence contractor reported growth in all four divisions in the year to March, ahead of expectations.
Meanwhile, US focused investment trusts were also lifted by a strong rally on Wall Street yesterday, which was gathering further momentum today.
The Nasdaq's gains on the day are near 4%, while the S&P 500 is up 2.6%.
3.41pm: If it's not pollution it's another thing
Claims that UK water companies are spending far more on infrastructure upgrades than operators in other countries are being investigated by the sector watchdog.
Ofwat has launched a probe due to concerns about value for money and higher consumer bills.
Research by a campaign group in Oxfordshire found upgrading a local sewage works will cost £435 million, more than 10 times the cost quoted when the project was proposed.
In comparison it cost £29 million to build a new sewage works in Denmark serving around half the number of people, though the cost of living and water and sewage costs are among the highest in Europe, and was 75% of the costs of a treatment works in the US that services four times as many people.
Ofwat told the Guardian that the data was being reviewed but suggested no changes will be made until the next regulatory price period in over five years' time.
A review by Sir Jon Cunliffe into the water industry was commissioned by the government last year, and sources told the newspaper that the figures are being looked at as part of the review.
2.45pm: Wall Street surges
The Nasdaq is off to a banger of a start, zooming 4% higher in initial trading, while the S&P 500 has climbed 3.1% and the Dow Jones 2.6%.
Nvidia, Amazon, Meta, Tesla and Broadcom are all up over 5%, some more than 6%.
"The good news has continued to flow on Wednesday, and this is having a positive impact on risk sentiment," says Kathleen Brooks, research director at XTB.
With that, the good vibes for the financial markets have wrapped around the world today, with Brooks pointing to bond markets in the US and the UK rallying at the middle and longer end of the curve, the dollar broadly higher and one of the best performers today, oil prices higher and gold falling sharply, "as safe havens lose their luster".
President Trump's willingness to not play hardball with China on tariffs "are creating the right mood for risky assets to recover, and at this stage there is nothing to suggest that the comments from both sides are not genuine", says Brooks.
"The issue is, there are still massive tariffs on Chinese and US imports, and talks have not yet started. To avoid a dismal outlook for global growth, as the IMF laid out on Tuesday, an agreement needs to be made quickly."
For now, the market is riding a wave of optimism.
1.17pm: Wall Street expected to fly
US stock futures are sharply higher ahead of the opening bell in New York, building on a powerful rebound the day before as markets respond positively to a marked shift in tone from the Trump administration on trade.
Nasdaq futures are up 2.7%, while those for the S&P 500 are pointing to a 2.3% gain, and for the Dow Jones it's around 1.6%.
After the dollar index hit a fresh three-year low of 97.55 earlier in the week, it rallied sharply yesterday and, after a bit of a drop, is holding fairly steady at 99.1 today.
David Morrison, market analyst at Trade Nation, says the shift in tone from the White House, particularly Trump’s assurance that he has "no intention" of removing Powell as Fed chair, has eased some of the pressure on the greenback.
"Many analysts felt that yesterday’s dollar rally may have marked the bottom for the dollar’s downtrend. But that call may prove to be too early. What happens over the rest of this week could help decide if the dollar is about to recover in the medium term, or if its slide has further to go," he says.
Back in London, the gains for the FTSE have dropped below 100, with advances for the benchmarks on the Continent also softer in the past hour.
12.50pm: Tesla turning point, says analyst
On Tesla, analyst Dan Ives at Wedbush said last night saw "a pivotal conference call for Musk to turn the corner from this dark chapter" with the earnings ending "a disaster quarter" of soft delivery numbers and Tesla missed the Street on "basically every metric".
Musk turning away from the DOGE to focus more on the electric vehicle maker was "more important than numbers" and "a turning point in the Tesla story".
Musk said he will spend 1-2 days per week working at DOGE and will now be spending most of his time as CEO of Tesla.
Ives, a former perma-bull on Tesla shares but who turned bearish due to the brand crisis sparked by Musk's political endeavours, was pleased, to say the least.
"In essence, this was an off ramp for Musk out of the Trump White House in our view as the global brand damage, political firestorm, and perfect storm chaos over the past few months will now end this volatile political chapter for Musk and we expect minimal, if any time focused on DOGE going forward," Ives says in a note this morning.
"We saw a dialed in Musk on the conference call we have rarely seen in the past....that read the room and investor/employee temperature properly (the board also likely played a key role) and understood this was the time not for politics...but instead move onto a new chapter and lead Tesla into its autonomous and robotics future."
Ives conceded that the brand damage caused by Musk in the White House over the past few months "will not go away just by this move and some of the damage will be stained forever in Europe and the US".
He estimates a 10% in "future demand destruction" from this, and still sees headwinds, tariffs, and growth challenges for Tesla over the coming year, but Musk recommitting as CEO as Tesla "is the biggest and best possible news Tesla investors could have heard last night".
12.12pm: Market mood is buoyant
The FTSE 100 is trundling along at just below its intraday high, up 1.4% and close to the level at which it closed on 3 April.
Croda International is leading the pack after posting a solid Q1 trading update, with sales up 8% year-on-year and guidance reaffirmed.
Anglo American, Antofagasta, Glencore and BP are among the top gainers, all up over 5% or 6% as mining and energy stocks rally on hopes of a softer US tariff stance. Shell is up 2.5%.
Standard Chartered and HSBC are up almost 7% and 5%, while Barclays and NatWest have gained 4.9% and 3.4%.
London's mid-cap FTSE 250 is up 1.3% at 19,488.56.
Continental indices are even firmer, with the DAX jumping 2.6% and the CAC 40 up 2.3%, reflecting a broad risk-on mood in global equity markets.
European markets are catching up with the strong rally on Wall Street overnight that was sparked by a change in tone on trade from the Trump administration.
Trump suggesting a deal would be reached between the US and China, while Treasury Secretary Scott Bessent said the trade war between the two countries was "unsustainable".
"Trump also said he doesn’t intend to fire US Federal Reserve chair Jay Powell which has calmed nerves," says Russ Mould at AJ Bell, following strong words from the President criticising Powell at the start of the week.
These new comments have "given markets a sense of optimism that recent chaos might have peaked and we’re heading towards calmer waters", says Mould. "It almost suggests that someone has taken Trump to one side and told him it’s time to be more responsible with his words and actions."
11.22am: Heathrow hit
Heathrow Airport saw a drop of 300,000 passengers in the first quarter of 2025 compared with the same period last year, following a major power outage that forced the near-total closure of operations on March 21.
A fire at the North Hyde substation cut electricity to the airport, leading to the cancellation of over 1,400 flights and affecting around 250,000 travellers.
Despite the setback, Heathrow said overall demand remained in line with 2024’s record performance, with growth expected to resume in the second quarter.
10.49am: Apple and Meta fined by EU
Apple and Facebook owner Meta have been fined €500 million and €200 million respectively for breaching the European Union's new digital market rules.
The European Commission said Apple had breached its anti-steering obligation under the Digital Markets Act (DMA), and that Meta breached obligations under the act to give consumers the choice of a service that uses less of their personal data.
The EC said it has now decided to close its investigation into Apple's user choice obligations under the DMA, following talks with the company, which included a preliminary view that Apple's contract terms concerning alternative app distribution breach the DMA.
The commission also found that Meta's Facebook Marketplace should no longer be designated under the DMA.
10.13am: PMIs may 'need to be taken with pinch of salt'
A naive translation of the April PMI in isolation into UK GDP suggests growth of -0.5% to 0.0% in the second quarter, ie a decent chance that the UK is heading for a small recession.
But "we would strongly recommend interpreting the PMI with a lot of caution", said economist Rob Wood at Pantheon Macroeconomics.
"The PMI survey picks up sentiment in addition to actual changes in output and overreacts to political events and uncertainty.
"The five-point month-to-month drop in the composite PMI after the Brexit referendum, when actual GDP ended-up growing solidly, provides a stark reminder of the need to take the PMI with a bucket of salt at times like these.
"There is no doubt that the chilling effect of the US President’s tariffs has slowed UK growth, but we seriously doubt the UK economy has suddenly dropped into recession," he said, estimating a 0.1% quarter-to-quarter GDP growth in Q2 and Q3.
He said the Bank of England monetary policy committee "will take the PMI with a pinch of salt too and will therefore fail to be bounced into a jumbo 50bp rate cut by the weak readings".
The MPC, he notes, kept rates on hold in its first meeting after the Brexit referendum despite the headline composite PMI dropping a much larger than now five points month-to-month.
"All the same, rate setters cannot afford to completely ignore the PMI," Wood adds, as the employment index dropped to suggest heightened uncertainty is chilling growth across the domestic economy.
The MPC may also want to steer well clear of 50bp rate cuts because of accelerating inflation indicators, as firms pass through payroll tax hikes, the minimum age increase and strong wages through to the prices they charge.
"We also suspect global companies will raise prices everywhere to offset a hit to margins in the US as, for instance, Sony did with the Playstation 5 price last week."
10am: Miners and China-focused lenders help FTSE wipe out deficit, DAX surges 3%
The FTSE 100 has jumped 125 points or 1.5% to 8,453.7 and a short while ago topped 8,467.
This brings the index almost back to where it closed on 3 April, the day after Donald Trump's 'reciprocal' tariffs announcement.
During a White House press event yesterday, the US President stated that tariffs on Chinese goods would "come down substantially," though he emphasized they would not be eliminated entirely.
He further remarked, "We're going to live together very happily and ideally work together," signaling a more conciliatory approach toward trade relations with China.
Trump also mentioned he does not intend to "play hardball" with Chinese President Xi Jinping, suggesting a softer stance in upcoming trade negotiations.
???????? #Trump Says He Has No Intention of Firing #Fed Chief Powell - Bloomberghttps://t.co/KuQZcm8Bak
— Christophe Barraud???????? (@C_Barraud) April 23, 2025
On the Continent, Germany's DAX is even putting the London index to shade, surging 3.1% higher, while France's CAC 40 is up 2.3% and the Italian and Spanish benchmarks are up 1.5% and 1.4%.
The Euro Stoxx 600 is up 2%, with top risers including tech names SAP and BE Semiconductor, industrials Croda, Valmet and Asko Nobel.
In London, Croda is the top blue-chip riser, followed by miners Antofagsata, Anglo American and Glencore, as well as lenders Standard Chartered and HSBC, indicating the China-focused nature of the gains this morning.
9.43am: Fresnillo and Reckitt fall
Fresnillo, down 6.2%, and Reckitt Benckiser, down 5.9%, are the big fallers on the FTSE so far.
The precious metals miner posted a fall in silver and gold production in the first quarter of 2025 but reaffirmed its full-year production guidance.
Strong sales of condoms and growth in emerging markets enabled Reckitt to offset weaker trading in Europe, North America and the Home division in the first quarter of 2025.
9.35am: PMIs weaker
Some fresh UK economic data, the UK purchasing managers' index survey, finds that activity in the services and manufacturing sectors dropped in the first couple of weeks of April.
The 'flash' reading of the composite PMI fell to 48.2 in April, from 51.5 in March, below the consensus forecast of 50.4.
This is a weighted average of the services PMI, which dropped to 48.9 from 52.5 in March and below the 51.5 consensus, and the manufacturing output index, which fell to 44.0 from 45.3 in March.
The overall manufacturing PMI dropped to 44.0 in April from 44.9, which was in line with the consensus forecast.
Data was collected between April 9 and 22, when uncertainty around US tariffs was fluctuating wildly.
8.56am: Croda climbing but still faces bumpy road
Croda shares are up over 9% to 2,977p at the top of the Footsie leaderboard, but it is from a big low that they are bouncing.
Earlier this month they fell below 2,600p for the first time since 2014.
After a tough couple of years, sales in the first quarter of 2025 rose 8%, supported by increased volumes across all business units and regions, while profit before tax was said to be in line with expectations.
On the US tariff regime, the Humberside-based group said its "well-balanced local manufacturing and procurement model helps to mitigate our direct exposure" but the full likely impact is still being assessed, with a tariff surcharge intended to be imposed.
Analyst Derren Nathan at Hargreaves Lansdown says the speciality chemical producer "has seen its recovery gain further momentum".
He said investors will be more focused on the outlook. "Croda’s focus on bespoke formulations means it’s deeply embedded with its customer base. Its broad manufacturing footprint also helps to provide some mitigation against tariffs. The company’s planning to pass on any incremental costs to customers too and with alternative sources of supply limited in many cases, it may be something clients will just have to accept."
The outlook remaining unchanged is "likely to come as a relief" especially to any shareholders that have bought in over the past year or two.
"The weakness in the valuation offers an opportunity to gain exposure to a quality company with a focussed strategy, but in the short-term, the ride could get more bumpy yet," he concludes.
8.31am: UK taxes will need to be raised
A couple of views on the UK public sector borrowing, which were undeniably weak heading into the new US tariff regime.
The public finances make difficult reading for Chancellor Rachel Reeves and difficult choices lie ahead, is the short view.
With borrowing estimated to have overshot the Office for Budget Responsibility's Spring Statement forecast by £14.6 billion in the year to March, "the fiscal outlook is only getting more challenging for the government", says Matt Swannell, chief economic advisor to the EY ITEM Club.
"US tariffs will likely hinder growth this year and next, which will see most of the headroom against the fiscal rules used up. Against this difficult backdrop, a fiscal re-think appears increasingly likely."
Borrowing over 2024-2025 totalled £151.9 billion, which was a big overshoot of the £137.3 billion forecast by the OBR in the Spring Statement.
"Having ended the year on a poor footing, recent US tariffs are only going to make the UK fiscal arithmetic more challenging," says Swannell.
"The Chancellor’s Spring Statement only left a slim margin for error against the fiscal rules. Most of this will likely be used up as the combination of reduced access to a major export market, a weaker global economy and lingering uncertainty is set to hold back growth. Meanwhile, the rise in government bond yields since the Spring Statement will, if sustained, make it more costly for the government to service its debt."
He says a "fiscal re-think" across the upcoming Spending Review and Autumn Budget looks "increasingly likely", with the autumn likely to see taxes raised or the fiscal rules bent if Reeves and Starmer wish to increase defence spending further or help some departments that face very challenging budgets.
Elliott Jordan-Doak, economist at Pantheon Macroeconomics, looks ahead to the next fiscal year and the upcoming Budget in October, predicting that "fracturing global trade and geopolitical uncertainties are going to make the Chancellor’s life even more difficult".
Pantheon had already expected that the government would need to increase defence spending beyond its recent commitment of 2.5% of GDP– to at least 3.0% of GDP by 2027 – with a mix of borrowing and tax increases to take the strain.
"But President Trump’s tariffs now mean a likely hit to GDP growth this year and next, which will further weigh on the public finances," he says, adding that "both taxes and borrowing will need to be raised".
8.12am: FTSE flies out of the gates
The FTSE 100 surged over 100 points higher initially but has quickly seen some of that excitement cut back, with the index standing 85 points higher at 8,413.4 now. That's a gain of just over 1%.
Top of the risers is Croda International PLC (LSE:CRDA), up 7.7% on the back of a first-quarter sales update.
China-focused lender Standard Chartered PLC is up 5%, helped by Trump's rowing back on tariff talk.
BP PLC is up 4.1% and Shell PLC 2.4% as oil prices continue to recover, with Brent crude up 1.4% to over $68 a barrel.
Babcock International Group PLC is up 3.7% on a strong set of prelims, with growth in all four divisions contributing to a 17% rise in underlying operating profit to £363 million.
7.58am: Big market moves
"There are big moves happening again in the markets this morning," says market analyst Kyle Rodda at Capital.com, who points to a stream of headlines stoking bullishness amongst investors.
He says Wall Street recovered most of its prior day losses on the back of comments from the Trump administration about progress on a trade deal with China.
"But the big moves happened after the closing bell, especially in the FX complex," he says. The pound fell from a recent high of $1.342 yesterday to $1.323 overnight but is back up to $1.331 this morning.
US futures have also shot higher, with President Trump walking back comments about firing Fed chair Jerome Powell.
"In typical Trump fashion, the President deflected the blame onto the media for 'running away with things', which is patently untrue," says the delightful Rodda.
"Trump explicitly said the administration was looking at ways at removing Powell, with the comments taking on more gravitas given an upcoming case in the Supreme Court that will decide whether a President can remove the head of independent agencies. But thanks again to a meltdown in markets and (one assumes) another intervention from Treasury Secretary Scott Bessent about the damage likely to be incurred if Fed independence is threatened, President Trump has back flipped."
7.52am: Reckitt Benckiser sees minimal impact from tariffs thanks to 'levers'
A first-quarter update from Reckitt Benckiser Group PLC (LSE:RKT) shows strong sales of condoms and growth in emerging markets helped offset weaker trading in Europe, North America and the Home division.
The FTSE 100 maker of fast-moving consumer goods said Donald Trump's new tariff regime would cause only an "immaterial annualised impact" on its cost of goods, which it is "confident in mitigating over the short to medium-term through a number of levers", one of which is said to be its "limited imports from China into the US".
Chief executive officer Kris Licht called it a "solid first quarter", though developed markets recorded declines, with North America 0.9% and Europe dropping 1.7%, affected by macroeconomic conditions and prior-year shipment phasing.
The Essential Home business posted a 7.0% fall in like-for-like revenue. Reckitt confirmed that is continues to "seek an exit in 2025, whilst recognising that market conditions may impact this timeframe".
An early response from analysts at Barclays has dropped into the inbox.
"The timing of operational weakness in Essential Home is unfortunate as Reckitt is attempting to exit the business. We note that press speculation of the sale price has gone from £6 billion to £3-4 billion," says analyst Iain Simpson.
Overall, he says Reckitt "looks to be delivering on its plan, in our view".
7.31am: THG rejects bid for MyProtein arm
THG PLC (LSE:THG) has confirmed that it rejected a cash and shares bid of up to £600 million for its MyProtein business from London-listed acquisition vehicle Selkirk Group PLC, which is run by its former chairman.
It said it is making this news public after some speculation in the media.
The proposal was described as "wholly unsolicited, largely unfunded, highly conditional and non-binding", mostly made up of shares in the shell vehicle, which floated last November.
7.16am: Not good news for Rachel Reeves
An initial estimate of public sector finances figures was the third highest on record, the Office for National Statistics says.
Public sector net borrowing excluding public sector banks was £151.9 billion, or 5.3% of GDP for the 2024/2025 financial year.
This was £20.7 billion (or 0.5 percentage points) more than in the previous year.
“Our initial estimates suggest public sector borrowing rose almost £21 billion in the financial year just ended as, despite a substantial boost in income, expenditure rose by more, largely due to inflation-related costs, including higher pay and benefit increases," says ONS chief economist Grant Fitzner.
“At the end of the financial year, debt remained close to the annual value of the output of the economy, at levels last seen in the early 1960s.”
Public sector net debt excluding public sector banks was 95.8% of GDP at the end of March 2025, 0.2 percentage points more than at the end of March 2024 and at levels last seen in the early 1960s.
Public sector net borrowing excluding public sector banks was £151.9 billion (or 5.3% of GDP) in the 2024 to 2025 financial year,
£20.7 billion (or 0.5 percentage points) more than in the previous year and the third highest total on record.
Read more ➡️ https://t.co/OKGJdDm02v pic.twitter.com/obTVjjOX9x
— Office for National Statistics (ONS) (@ONS) April 23, 2025
7.11am: FTSE 100 tipped for roaring start
The FTSE 100 is being tipped to get off to a roaring start on Wednesday, following a strong session on Wall Street overnight and a suggestion of a possible de-escalation of China tariffs by Donald Trump.
London's blue-chip share index has been called 91 points higher on the futures market, after added almost 53 points yesterday to close at 8,328.6.
Earnings from Tesla last night were, to be brief, disappointing. The company said it remains on track for the pilot launch of its Robotaxi by June and rolling out its Optimus humanoid robot this year. More on the EV maker in a bit.
US stocks bounced back strongly from a rough start to the week, with the Dow Jones, Nasdaq and Russell 2000 all soaring 2.7%, and the S&P 500 advancing 2.5%.
Asian markets are decked out in green this morning, led by the Hang Seng's 2.3% gain and the Nikkei's 1.9% increase.
5am: What to watch on Wednesday
UK results season is set to remain fairly quiet on Wednesday, though there are updates expected from FTSE 250-listed Quilter and small caps, including PensionBee and Northcoders.
Corporate action in the US might grab the attention from UK investors, including reviewing Tesla's earnings from last night, plus new releases from Boeing, IBM and Philip Morris.
Mid-week macroeconomic data could be interesting, with the PMI surveys for many major economies revealing data for the first two weeks after Donald Trump's 'liberation day' announcement on so-called reciprocal tariffs.
Announcements due on 23 April:
Trading updates: PensionBee Group, Quilter
Interims: AB Dynamics, Ten Lifestyle Group
Finals: Gresham House Energy Storage Fund, Northcoders Group
Overseas earnings: AT&T, Boeing, Keurig Dr Pepper, Philip Morris International, Thermo Fisher Scientific (pre-market), IBM, Newmont, ServiceNow (after close)
AGM: AFC Energy, Bellevue Healthcare Trust, Bunzl, Entain, NatWest Group, Nichols, Smithson Investment Trust
Economics announcements: Public Sector Net Borrowing (UK), Flash PMI surveys (UK, EU, US), GFK Consumer Confidence (GER), Balance of Trade (EU), MBA Mortgage Applications (US), New Homes Sales (US), Crude Oil Inventories (US)