London's FTSE 100 closed 0.25% in the green on Tuesday, the last day of the second quarter, as investors examined the latest economic growth data.
Growth in the UK's quarterly gross domestic product was confirmed at 0.6% for the first quarter, higher than the revised 0.1% uptick in the prior three-month period, final data from the Office for National Statistics showed. Annually, the British economy expanded 0.9% in the quarter, consistent with the revised growth earlier and against the preliminary reading of a 1.1% jump.
Meanwhile, British shop price inflation stood at 1.2% year over year in June, matching May's reading and market expectations, according to the British Retail Consortium.
"While a competitive market is keeping inflation in check for now, retailers face mounting cost pressures, including higher National Insurance, the triple packaging tax and higher input costs from extreme weather and geopolitical tensions," BRC Chief Executive Helen Dickinson said, adding that easing taxes and levies on energy bills would alleviate pressure on retailers.
In corporate news, shares of J Sainsbury (SBRY.L), d/b/a Sainsbury's, rose 1.11% after the grocer reported a 2.7% increase in fiscal first-quarter retail sales and maintained its fiscal 2027 guidance for underlying operating profit of 975 million pounds sterling to 1.08 billion pounds.
"Sainsbury's has released a Q1 trading update this morning with Group Retail sales growth a little ahead of consensus expectations, driven by slightly better than expected Grocery sales and a resilient performance at Argos, against a tough comparable," RBC Capital Markets said. "We are encouraged by SBRY's efforts to improve the range and the digital experience at Argos, which we think is helping to drive volume growth."
Aerospace and defense company Babcock International Group (BAB.L) climbed 2.74% to join the top FTSE 100 gainers as Deutsche Bank Research lowered its price target to 11 pounds from 11.4 pounds, with a hold rating.
The analysts highlighted the UK Ministry of Defence's confirmation that it plans to procure at least six Common Combat Vessels to replace the Royal Navy's Type 45 destroyers. "These plans replace earlier plans for a Type 83 destroyer (and also the Type 32 per other press speculation today). The statement notes the following - 'Rather than concentrating capability in a small number of large, expensive ships, the Royal Navy's shift to a hybrid navy will mix crewed and uncrewed capabilities and be more suited to the pace and nature of modern warfare.'"