FTSE 100 declines following business growth survey

On March 24, 2025, London's FTSE 100 index experienced a slight downturn, finishing nine points lower at 8,638, a decline of 0.1%. This dip occurred despite a positive business survey that indicated the UK private sector grew at its fastest rate in six months during the early weeks of March. The S&P Global flash UK composite purchasing managers' index (PMI) reported numbers higher than previous months, yet economists highlighted that the rise does not denote a significant recovery in the market. As traders anticipated Chancellor Rachel Reeves' Spring Statement due later in the week, the muted performance of the FTSE was a notable reaction to broader economic uncertainty. Furthermore, although business expectations remained near a 25-month low observed in January, there were growing concerns surrounding upcoming increases in taxes and labor costs post-April, which stemmed from the previous autumn budget’s decisions. This backdrop has left many investors cautious, as broader European markets reflected mixed fortunes; Germany’s Dax index fell by 0.2% and France’s Cac 40 dropped 0.3%. In contrast, US markets showed positivity with the S&P 500 increasing by 1.6% and the Dow Jones up by 1.2% right after UK market closure. The pound sterling also saw fluctuations, weakening by 0.2% against the dollar at 1.2903, while it gained 0.1% against the euro at 1.1960. In the sphere of corporate developments, Morrisons announced potential job redundancies as it evaluates strategies to close some cafes, convenience stores, and fresh food counters, citing operational costs outpacing customer spending as the driving reason. CEO Rami Baitieh emphasized that these changes are part of efforts to refresh the company’s offerings. On another note, Sir Martin Sorrell’s marketing firm S4 Capital reported widened losses for the previous year, forecasting continued challenges in trading conditions influenced by declines in tech spending and concerns regarding global trade tariffs. In light of these challenges, the firm reduced its workforce by 7% while announcing its first-ever dividend to investors, which reacted positively by pushing shares up by 5.6%. Amidst these mixed signals, the largest movers in the FTSE 100 saw notable increases for companies like Pershing Square and Prudential, while shares for Vodafone and JD Sports faced declines, reflecting the uncertainty and volatility in current market conditions.