Daily market update: UK GDP surprises, Shein IPO, BP

“It was a pleasant surprise to see UK stock markets moving higher for the second day in a row in early trading,” says Russ Mould, investment director at AJ Bell. 

“When you consider that US markets fell by 3% to 4% last night on Wall Street and tariff uncertainty continues to dominate the headlines, one might have expected investors to be feeling gloomy. Yet we’ll take all the good news we can get at the moment.

“Admittedly, the UK market struggled to hold onto early gains, but at least there wasn’t a sharp slump to start the day with a headache.

“UK GDP figures coming in much stronger than expected will have helped to lift the market mood. It gives hope that the country is more resilient than some might think. Unfortunately, there is a feeling that this might be as good as it gets for a while.

“March retail footfall was down 5%, according to the British Retail Consortium, which suggests consumers weren’t in the mood to splash the cash as they could see what was coming around the corner. Sadly, the barrage of bad news proved to be much worse than was expected.

“Forget April showers, this month has been a monsoon of bad news. April has brought big rises in utility and council tax bills. We’ve also had employers stomach billions of pounds of extra costs which will no doubt be passed on to the customer through higher prices. Furthermore, there was nothing to celebrate about Trump’s Liberation Day announcement as it turned financial markets upside down. 

“There remains considerable uncertainty around the impact of tariffs on economies and company earnings, and that could keep markets volatile for some time. Investors shouldn’t panic, however, as history shows that markets have a habit of going through bad patches and then recovering. It’s important to stay calm, stay focused and to stay invested so as to be in a position to ride the recovery if or when it comes.”

Shein

“Reports that Chinese fast fashion retailer Shein has FCA approval for a UK stock market listing should be an important step on the road to turning its IPO ambitions into reality.

“London is crying out for new listings of scale and Shein getting its IPO off the ground and shares listed could help raise the profile of the UK market and potentially draw in more big names. The UK regulator’s apparent green light is undoubtedly significant, particularly in light of some of the concerns which have been expressed around Shein’s corporate governance and the ethics of its supply chain.

“However, the current market environment could render it moot and makes the targeted timetable of the first half of this year a big ask.

“Getting its IPO away at all could prove as tricky thanks to the levels of global market volatility unleashed by the US administration’s trade policies. This is only exacerbated by the fact Washington continues to pursue a tit-for-tat trade war with Beijing.

“Not only will this make it more difficult to convince investors to back its listing but Shein does business in the US and could well see a significant impact from tariffs beyond just a hit to sentiment. It suggests Shein will have to stress to prospective investors that its growth is not reliant on the US and that expansion across a wide range of countries is key to its future.

“Notably, Shein’s move still requires sign-off from the relevant Chinese authorities too and this may well be affected by the current turmoil.”

BP

“While a preview of quarterly figures ordinarily wouldn’t be assigned too much significance by serious investors, such is the pressure BP and its management are under that they have little margin for error.

“The teaser ahead of next month’s full quarterly results also presses on one of the market’s big sore points with the company – its onerous debt pile. While BP has pegged the increase in leverage on seasonal issues and expects to see this unwind in future quarters, there will still be nagging concerns about the uptick. 

“After all, oil prices have been moving sharply against BP of late and are unlikely to average the $75 per barrel they did in the first three months of the year. With lower gas production also flagged, there is little to convince the company’s activist shareholder Elliott that things are moving in the right direction. 

“Despite recent news that chair Helge Lund would be leaving, CEO Murray Auchincloss is still under the spotlight amid scepticism about his recovery plan. There is a growing sense that more radical steps will be needed to steer BP back on course.”

These articles are for information purposes only and are not a personal recommendation or advice.