London midday: Stocks pare gains as investors assess US-EU trade deal

(Sharecast News) - London stocks had pared earlier gains to trade just a touch higher by midday on Monday as investors continued to assess the impact of the US-EU trade deal struck over the weekend. The FTSE 100 was up 0.1% at 9,124.65.

Sentiment was lifted after US President Donald Trump and European Commission President Ursula von der Leyen agreed a trade deal that will see the EU pay 15% tariffs on most goods entering the US. Trump had threatened to implement a 30% tariff from Friday.

Russ Mould, investment director at AJ Bell, said: "The much-awaited trade agreement between the US and the EU has finally been struck, sending a wave of relief across financial markets.

"As widely expected, the agreed tariffs aren't as high as previously feared, which means investors are taking the trade agreement as a massive win.

"In reality, this is far from a done deal. It is only a framework and still needs to be signed into law. Furthermore, Donald Trump has form in constantly tinkering at the edges and what he says one day might not be the same as the next.

"Investors are taking each bit of news one day at a time and today is one of celebration. The agreement is significant because it avoids a trade war between the US and the EU, which could have been troublesome for economic growth and investor sentiment."

On home shores, the latest survey from the Confederation of British Industry showed that retail sales continued to struggle in July as rising prices and economic uncertainty weighed on household demand, although the pace of decline slowed from June.

The retail sales volume balance was -34%, up from -46% a month earlier, but marking the tenth consecutive month of decline.

The balance of expected sales improved to -31 in July from -49 the month before, with retailers expecting sales to fall at a broadly similar pace next month.

Martin Sartorius, principal economist at the CBI, said: "Retail annual sales volumes continued to fall in July, although the pace of decline moderated from June's sharp drop. Firms reported that elevated price pressures - driven by rising labour costs - and economic uncertainty continue to weigh on household demand, which has contributed to sales volumes falling since October 2024. These trends of weak demand and uncertainty were mirrored across the wider distribution sector, with wholesale and motor trades also seeing declining sales.

"With long-term strategic ambitions outlined, the government must now seek to build shorter term confidence in its growth mission. It can do this by collaborating with business to deliver an Autumn Budget that acknowledges the burden firms are facing and sets clear policy delivery targets. This includes providing clarity on how the government will deliver its action plan to tackle regulatory barriers to growth, position businesses to invest in the people they need through a flexible Growth and Skills Levy, and find an appropriate landing zone for the Employment Rights Bill."

In equity markets, GSK rallied after saying it has entered into a partnership with Chinese pharmaceutical outfit Hengrui Pharma to jointly develop up to 12 medicines, providing new growth opportunities for the UK pharmaceutical group beyond 2031.

FirstGroup advanced after saying it has bought Tetley's Coaches, a Leeds-based coach and bus operator that has been in operation for over 75 years, for an undisclosed sum.

IT support and services firm Computacenter reversed earlier heavy losses as it said it continues to expect FY25 adjusted operating profits to be ahead of FY26 after delivering "strong" revenue growth in the first half.

However, it also said it experienced softer trading in Germany and France in the second quarter, with the performance in France significantly weaker than last year.

Computacenter said that while the broader geopolitical and macro uncertainty is expected to persist, it expects some recovery in public sector activity in Germany in the second half while France is expected to remain challenging.

On the downside, food producer Cranswick turned lower after it held annual guidance as like-for-like revenue rose 7.9% on the back of new business wins and increasing consumer demand for natural protein.

Cranswick still expects adjusted profit before tax to be in line with consensus expectations of between £206.5m and £213.6m.

Ocean Wilsons - a supplier of maritime services in Brazil - tumbled after it agreed a £900m all-share merger with Hansa Investment Company.

Market Movers

FTSE 100 (UKX) 9,124.65 0.05% FTSE 250 (MCX) 22,139.11 0.10% techMARK (TASX) 5,276.02 0.30%

FTSE 100 - Risers

Smurfit Westrock (DI) (SWR) 3,669.00p 2.89% Flutter Entertainment (DI) (FLTR) 22,760.00p 1.79% Rightmove (RMV) 791.40p 1.41% Intertek Group (ITRK) 4,978.00p 1.34% BP (BP.) 402.85p 1.27% CRH (CDI) (CRH) 7,434.00p 1.23% GSK (GSK) 1,408.50p 1.15% ICG (ICG) 2,170.00p 1.12% Beazley (BEZ) 911.00p 1.11% SEGRO (SGRO) 660.20p 1.10%

FTSE 100 - Fallers

BT Group (BT.A) 214.40p -3.73% Marks & Spencer Group (MKS) 348.00p -1.97% Vodafone Group (VOD) 83.54p -1.79% Centrica (CNA) 160.35p -1.47% Glencore (GLEN) 313.65p -1.45% Kingfisher (KGF) 275.10p -1.36% Tesco (TSCO) 423.00p -1.28% NATWEST GROUP (NWG) 513.20p -1.16% Rio Tinto (RIO) 4,628.50p -1.10% Sainsbury (J) (SBRY) 303.00p -0.98%

FTSE 250 - Risers

NCC Group (NCC) 152.80p 2.55% Lion Finance Group (BGEO) 7,530.00p 2.38% Bytes Technology Group (BYIT) 348.00p 2.23% Vietnam Enterprise Investments (DI) (VEIL) 699.00p 2.19% FirstGroup (FGP) 223.60p 2.10% Wizz Air Holdings (WIZZ) 1,221.00p 2.01% Foresight Solar Fund Limited (FSFL) 92.00p 2.00% Kainos Group (KNOS) 734.00p 1.87% Foresight Group Holdings Limited NPV (FSG) 469.00p 1.85% VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 471.50p 1.84%

FTSE 250 - Fallers

Ocean Wilsons Holdings Ltd. (OCN) 1,275.00p -12.67% Ocado Group (OCDO) 328.40p -5.41% ITV (ITV) 83.30p -2.80% Close Brothers Group (CBG) 421.40p -2.36% Patria Private Equity Trust (PPET) 547.00p -1.97% Oxford Instruments (OXIG) 1,872.00p -1.89% Future (FUTR) 736.50p -1.80% Rank Group (RNK) 155.80p -1.77% Dr. Martens (DOCS) 82.55p -1.49% Mitie Group (MTO) 139.60p -1.27%