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.

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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.