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Late market roundup: UK trade deal lifts mood ahead of US-China talks

London stocks closed in positive territory on Friday, lifted by trade optimism following the US-UK trade agreement, while investors looked ahead to US-China talks over the weekend.

The FTSE 100 index ended up 23.19 points, 0.3%, at 8,554.80. The FTSE 250 was up 47.22 points, 0.2%, at 20,504.37, and the AIM All-Share was up 5.23 points, 0.7%, at 725.65.

The Cboe UK 100 was up 0.2% at 852.10 and the Cboe UK 250 was up 0.2% at 17,937.74, but the Cboe Small Companies was down 0.8% at 15,538.38.

The optimism follows the announcement on Thursday of a new trade deal between the US and UK, which included import taxes affecting British high-end carmakers being cut from 27.5% to 10%, and the removal of a 25% tariff on steel.

‘This has been a momentous week for the UK - with the UK striking trade deals with the US and India - the former expected to shave off a few basis points from our preliminary impact assessment and the latter expected to add 0.1pp to UK long-term GDP (according to Treasury estimates),’ commented Deutsche Bank analysts. ‘To be sure, there is a third deal in the making – and one that perhaps could have a more meaningful impact on the economy: a UK-EU trade deal.

‘Importantly, the term sheet of the US-UK trade deal leaves the UK with sufficient policy space to engineer a deeper trade deal with the EU, given the lack of changes to UK food standards.’

Meanwhile, Bank of England Chief Economist Huw Pill - following the central bank’s rate cut to 4.25% - said: ‘I think it is important to say that the analysis in the baseline forecast does not suggest that there’s a dramatic shift in the behaviour of the UK economy, on the back of these trade announcements and trade uncertainty.’

Pill was among the Monetary Policy Committee members who voted to leave rates unchanged.

‘We do need to be cognisant of the fact that there are potential channels by which the UK benefits from having somewhat preferential trade arrangements through this new agreement with the US,’ he continued. ‘But there are also channels by which, to the extent that that puts other jurisdictions at a disadvantage and we trade with those jurisdictions, that can have further knock-on effects.’

On the FTSE 100, British Airways owner International Consolidated Airlines Group closed up 2.4%.

It swung to a pretax profit of €239 million in the first quarter of 2025 from a loss of €87 million, while revenue climbed 9.6% on-year to €7.04 billion and adjusted operating profit jumped to €198 million, beating company compiled consensus of €158 million.

LondonMetric was up 0.7%, while on the FTSE 250, Urban Logistics REIT rose 4.7%.

LondonMetric Property has agreed to acquire Urban Logistics in a cash-and-share deal worth approximately £698.9 million.

Each Urban Logistics shareholder will receive 0.5612 new LondonMetric shares and 42.8 pence in cash, valuing each Urban Logistics share at 150.3p. The offer represents a 21.8% premium to Urban Logistics’ closing price of 123.4p on April 2, the day before the target revealed it had received an approach.

Among small caps, Brave Bison ended 1.4% lower, but Centaur Media was up 12%.

Brave Bison confirmed it has entered exclusive negotiations to buy online learning business MiniMBA from business consultancy group Centaur for a £19 million enterprise value.

Brave, a digital advertising and technology service provider, said MiniMBA ‘would form the cornerstone of a new eLearning & business intelligence division’.

In European equities on Friday, the CAC 40 in Paris was up 0.7%, while the DAX 40 in Frankfurt was up 0.6%.

Leaders of the so-called ‘coalition of the willing’ are set to travel to Ukraine for further talks, Ukrainian President Volodymyr Zelensky has said.

He said there was ‘serious work ahead’, adding: ‘We need this coalition and we need it to be strong enough to guarantee security the way we all agree on.’

The coalition has been spearheaded by Britain and France, but Downing Street would not confirm whether Keir Starmer planned to attend Saturday’s meeting. Military officers from around 30 countries have been involved in drawing up plans for the coalition, which would provide a peacekeeping force in the event of a ceasefire being agreed between Russia and Ukraine.

The pound was quoted higher at $1.3299 late on Friday in London, compared to $1.3295 at the equities close on Thursday. The euro stood at $1.1263, slightly lower against $1.1265. Against the yen, the dollar was trading at JP¥145.18, slightly higher compared to JP¥145.15 the day before.

Stocks in New York were mixed. The Dow Jones Industrial Average was down 0.2%, the S&P 500 index up 0.64 points, and the Nasdaq Composite up 8.69 points.

US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer are set to meet Chinese Vice Premier He Lifeng in Switzerland on Saturday and Sunday, marking the first talks between the superpowers since Trump unveiled his tariffs.

Also over the weekend, China is due to release consumer price and producer price inflation data.

Brent oil was quoted at $63.66 a barrel, up from $62.75 late Thursday.

Gold was quoted higher at $3,342.57 an ounce against $3,340.18.

Monday’s economic calendar has comments from Bank of England representatives, including Deputy Governor Clare Lombardelli, current account data from Japan, and the US monthly budget statement.

The local corporate calendar has full-year results from Likewise Group, first-quarter results from Caledonia Mining, and a trading statement from Diversified Energy.

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