FTSE 100 Closes Above 8,600 as UK GDP Outperforms Expectations

The FTSE 100 rallied into the close, fighting back from a bearish open that had seen the benchmark index shed more than 0.5% in the first 20 minutes of trading. From there, a 1% rally led the Footsie to close 0.57% up on the day, and above the 8,600 level.

Looking to the leading names, and Hikma Pharmaceuticals shares (LON: HIK) ended the day up 7.37% after an impressive revenue outlook boosted sentiment. Fresnillo (+3.52%), BAE Systems (+3.17%), and National Grid (+3%) all contributed to the climb, with NG earnings also coming in strong.

On the other side of the win/lose divide; THG (-4.02%) and Entain (-1.75%) ended the day as two of the laggards, with major UK energy names BP (-3.35%), and Shell (-1.65%) also coming under pressure.

In GDP-related news, UK GDP grew 0.2% on a month-on-month basis in March, which was above the anticipated flat growth, following a growth rate of 0.5% in February. Over Q1, the year-on-year GDP increase was recorded at 1.3%, slightly surpassing the consensus estimate of 1.2% but reflecting a slowdown from the earlier 1.5% growth rate.

The UK's economic indicators revealed a narrowing of the underlying trade deficit by £3.6bn, reaching £6.6bn in the first quarter. This covers trade in both goods and services, highlighting improvements in trade figures. Specifically, the deficit in goods reduced by £4.3 billion to £55.2 billion. However, the services surplus slightly narrowed by approximately £0.7 billion to an estimated £48.6 billion. A noteworthy improvement was seen in the trade balance for March, lessening to a £19.9 billion deficit from February's £21 billion.

While the UK's macroeconomic metrics display a nuanced picture of improvement, the FTSE 100 seems unaffected, suggesting investor concerns may lie elsewhere, such as sector-specific issues or broader economic uncertainties. The positive developments in trade and GDP have not shielded the index from volatility, particularly with stark contrasts in corporate performance such as those exhibited by Aviva and ITV PLC.