London Stocks Surge Amid Economic Data and Key Stake Investments

London stocks saw an upturn on Wednesday, with the FTSE 100 rising by 0.7% and the FTSE 250 by 0.4%. The boost followed April's economic data showing a flat growth, sparking speculations of an early Bank of England rate cut. Major movers included Rentokil and Legal & General.

(For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window) *

FTSE 100 up 0.7%, FTSE 250 adds 0.4% *

Rentokil jumps after report Trian Fund Management amassed significant stake *

Legal & General falls after its $254.9 million buyback, merging investment units *

British economy was flat in April - as expected (Updated at 0807 GMT)

By Pranav Kashyap June 12 (Reuters) -

London stocks moved higher on Wednesday, prompting bets of an earlier rate cut after data showed the British economy slowed to a halt in April, while pest control firm Rentokil Initial added to the gains. The blue-chip FTSE 100 was up 0.7% at 8,201.79 points, set for the best intraday percentage gain in over a month and on track to snap a three-day losing streak.

The mid-cap FTSE 250 edged 0.4% higher. In the past two weeks, the benchmark index has dipped thrice below the 8,200 level, often regarded as one of the key signals indicating a potential shift towards a correction.

Meanwhile, a swift rebound in Britain's economy in early 2024 came to a halt in April after data showed economic output was flat for the month. Traders are now pricing in nearly a 40% chance of an August rate cut by the Bank of England.

"That we didn't see a contraction (in UK's GDP) was not considered as negative growth. It being flat is actually being taken as good news by markets because it feels like a blip," Danni Hewson, head of financial analysis at AJ Bell. Among individual stocks, Rentokil Initial surged 13.2% after Bloomberg News reported that Nelson Peltz's Trian Fund Management has amassed a significant stake in the pest-control firm.

Rentokil also pushed the industrial support sector to the top. Legal & General lost 3.5% after the life insurer said it would offer a 200 million pound ($254.9 million) share buyback and merge its investment units.

Molten Ventures was the top gainer on the mid-cap index, with a 10.8% jump, after the venture capital firm reported its final-year results. Across the pond, investors are bracing for U.S. inflation data along with the Federal Reserve's monetary policy decision. Both are due later on Wednesday.

"There's going to be a whole load of focus on the U.S. inflation figures ... It's that sort of reading between the lines that investors are looking for," Hewson added.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)