Stocks in London, Paris and Frankfurt were mostly higher at Friday midday, despite UK data painting a ‘gloomy’ picture and London-listed housebuilders’ shares falling.
Meanwhile, in the UK, the number of companies going bust across England and Wales increased last month after firms swallowed increased costs.
Official data from the Insolvency Service showed there were 2,238 company insolvencies in May, an 8% jump compared with April, and 15% higher than the same month last year.
‘Businesses are now facing newer challenges that threaten their viability and this means we are likely to continue to see a steady stream of company insolvencies in the coming months,’ commented S&W’s Mark Ford. ‘Higher costs resulting from increases to employer national insurance contributions, the minimum wage and business rates are all heaping considerable pressure on businesses, particularly those that feel they are unable to increase prices for fear of losing customers.’
The FTSE 100 index was up 42.35 points, 0.5%, at 8,834.15. The FTSE 250 was up 154.37 points, 0.7%, at 21,228.36, and the AIM All-Share was up 2.88 points, 0.4%, at 761.07.
The Cboe UK 100 was up 0.5% at 879.67, the Cboe UK 250 was up 0.8% at 18,762.88, and the Cboe Small Companies was up less than 0.1% at 17,016.06.
Berkeley remained the FTSE 100’s worst performer, down 8.2%.
The housebuilder said it expects pretax profit of £450 million for its new financial year, and that profit in the following year is ‘likely to be similar’.
Pretax profit of £528.9 million for the financial year ended April 30, down 5.1% on-year from £557.3 million, and revenue edged up to £2.49 billion from £2.46 billion.
‘The departure of [Chair Michael Dobson] and a warning that returns will be below targeted levels in the medium term put housebuilder Berkeley on the back foot,’ AJ Bell’s Russ Mould commented. ‘The company is guiding for a substantial drop in pre-tax profit for the current year and for profit to remain flat in the year afterwards, with the relatively downbeat outlook reflecting a volatile operating environment.
‘Berkeley previously earned a reputation for shrewdly calling the housing market cycle, so the company’s conservative guidance in its latest results announcement has made investors sit up and take notice. That’s caused shares across the housebuilding sector to fall.’
For example, fellow housebuilder Persimmon was down 0.9% on the FTSE 100, while Barratt Redrow was down 0.4% and Taylor Wimpey lost 0.3%.
E-commerce retailer THG led the FTSE 250, up 6.1%. Cybersecurity company NCC was the worst performer, down 3.6%. Mid-cap housebuilders in the red included Vistry, down 2.1%, and Bellway, down 0.4%.
Polar Capital Global Financials Trust was down 0.3%.
The investor in financial companies has priced the 100% tender offer and connected share placing that it first announced back in April.
The trust will buy back shares at 209.43 pence each, equal to its net asset value on Wednesday this week, minus expenses. Shares repurchased under the tender offer will be placed with institutional investors at 210.47p.
The placing price is conditional on it being within 3% of NAV per share at the close on Monday, with the results to be announced on Tuesday.
Pri0r1ty Intelligence led AIM, up 63% after it formally adopted a bitcoin treasury management policy to support rising demand from clients transacting in cryptocurrency.
ValiRx was the second-biggest winner on AIM, rising 32%.
The life sciences company has signed an intellectual property licence agreement with Ambrose Healthcare to develop and commercialise ValiSeek asset VAL401. It said the deal is worth up to £16 million plus royalties.
Meanwhile, AJ Bell’s Danni Hewson said that the latest UK data painted a ‘gloomy economic picture’ for Chancellor Rachel Reeves.
UK government borrowing in May reached its highest level since during the Covid-19 pandemic. The ONS reported that the UK public sector net borrowing requirement was £17.69 billion in May, against £20.05 billion in April.
‘The decision to increase employer national insurance contributions was a painful and unpopular one, but businesses were told the government needed their help to fill the black hole they’d found in the public finances,’ Hewson explained. ‘This set of figures shows the impact of that decision, and the tax take is up, but not by enough to counter increased running costs and inflation-linked benefit hikes.’
Hewson said the figure ‘will only add to speculation that the chancellor will have to announce more spending cuts or further tax increases at the next Budget...One big shock could wipe out any headroom Rachel Reeves might have, and there are still question marks about how much of GDP should be spent on defence and where the money is going to come from.’
The ONS also reported that UK retail sales fell by 2.7% in May, worse than the 0.5% decrease expected by FXStreet-cited market consensus. On an annual basis, retail sales decreased by 1.3% in May, with market consensus having expected a 1.7% increase.
‘That moment of jeopardy at the supermarket till is back, even if food inflation isn’t anywhere near as hot as it was in 2023. Rising prices are making people think carefully once again about how much they are putting in their baskets,’ Hewson said. ‘The current spell of good weather bodes well for this weekend’s food shop but worries about rising petrol prices may force people to reconsider that extra pack of burgers or that case of sparkling wine.’
In European equities on Friday, the CAC 40 in Paris was up 0.5%, while the DAX 40 in Frankfurt was up 0.8%.
In Germany, according to the Federal Statistical Office on Friday, incoming orders rose by 4% on-year in April, and increased by 0.8% on-month.
The data supports cautious optimism that export-oriented German industry may be emerging from a prolonged downturn. After a period of sustained weakness, marked by falling orders and significant job cuts, recent months have shown signs of green shoots.
The pound was quoted higher at $1.3493 at midday on Friday in London, compared to $1.3429 at the equities close on Thursday. The euro stood at $1.1524, higher against $1.1468. Against the yen, the dollar was trading lower at JP¥145.43 compared to JP¥145.65.
Stocks in New York were called lower. The Dow Jones Industrial Average was called down 0.2%, the S&P 500 index down 0.2%, and the Nasdaq Composite down 0.2%.
The yield on the US 10-year Treasury was quoted at 4.42%, widening from 4.36% on Wednesday. The yield on the US 30-year Treasury was quoted at 4.92%, widening from 4.86%.
Brent oil was quoted lower at $77.00 a barrel at midday in London on Friday from $78.59 late Thursday.
Gold was quoted lower at $3,356.15 an ounce against $3,368.94.
Still to come on Friday’s economic calendar, the docket includes the US Philadelphia Fed manufacturing index, the US Conference Board leading index, and Canada’s retail sales and producer price inflation data.
Copyright 2025 Alliance News Ltd. All Rights Reserved.