Europe close: Stocks manage gains amid Westminster turmoil, Trump developments

13th May 2026 15:28

(Sharecast News) - European shares finished higher on Wednesday as investors looked ahead to US president Donald Trump's visit to China, while the UK's leadership uncertainty continued to weigh on sentiment around domestic assets.

The pan-European Stoxx 600 rose 0.66% to 610.63.

Germany's DAX gained 0.61% to 24,101.73, France's CAC 40 added 0.23% to 7,998.67, and London's FTSE 100 advanced 0.58% to 10,325.35.

Brent crude futures were last down 0.91% on ICE at $106.79 a barrel, while the NYMEX quote for West Texas Intermediate edged up 0.23% to $102.42.

In the UK, prime minister Keir Starmer held a 16-minute meeting with health secretary Wes Streeting, widely seen as the main potential challenger to his leadership, a day after refusing to resign despite the departure of four ministers and growing calls for him to stand down.

Speculation later circulated that Streeting was preparing to resign on Thursday and launch a leadership bid, with UK media citing a source close to the minister.

The reports sent UK bond yields higher as traders weighed the risk of increased spending under any successor to Starmer.

Labour also faced mounting pressure from Reform, led by Nigel Farage, after the party made significant gains in last week's local council elections.

"The morning's relief rally in UK assets has been tempered by Wes Streeting's move against Keir Starmer, barely 24 hours after the leadership challenge appeared to have fizzled out," said Chris Beauchamp, chief market analyst at IG.

"UK investors now face the prospect of more political uncertainty that adds to the already clouded outlook.

"However we haven't seen a full reversal of the gains in the FTSE 100, helped by weakness in the pound which has continued to lose ground against the dollar."

Patrick Munnelly, market strategy partner at TickMill, noted that the FTSE 100 closed with the "headline tape doing little justice to the churn underneath".

"The index remains optically well supported by global defensives, energy, miners and dollar earners, but the domestic sleeve traded heavier as Westminster risk bleeds back into UK assets," he said.

"The message from the day was simple: international FTSE exposure still clears the bar; UK policy-sensitive beta does not get the benefit of the doubt. Domestic politics was the marginal price-setter.

"Renewed focus on fiscal headroom, possible tax leakage and leadership stability kept the market leaning cautious on banks, insurers, housebuilders and utilities."

Investors were also focused on Trump's visit to Beijing, where he is due to meet Chinese president Xi Jinping.

Trade, Taiwan and the Iran war are expected to dominate talks between the leaders of the world's two largest economies.

Euro area economy manages growth in first quarter

On the economic front, the eurozone economy grew by 0.1% in the first quarter compared with the final three months of 2025, according to Eurostat's flash estimates.

Compared with the same period a year earlier, seasonally adjusted GDP rose 0.8% in the euro area and 1.0% across the European Union.

Separate Eurostat data showed eurozone industrial output rose 0.2% month-on-month in March, while annual output fell 2.1% in the euro area and 1.0% in the EU.

In the UK, food and drink prices across the hospitality sector fell 1.4% month-on-month in March, according to the latest Foodservice Price Index from NIQ and Prestige Purchasing.

NIQ said the decline was likely temporary, reflecting delayed cost transmission through supply chains, seasonal buying of fresh vegetables and forward-buying strategies that shielded the domestic market from wider volatility.

However, the report warned that global benchmarks across major commodity groups, including cereals, meat, dairy, vegetable oils and sugar, were now rising simultaneously.

Higher oil prices and the broader energy crisis were expected to feed into freight, packaging, agricultural inputs and energy-intensive manufacturing costs.

Reuben Pullan, senior insight consultant at NIQ, said the recent easing in food and drink inflation was likely to be "short-lived", adding that oil shocks and geopolitical uncertainty were storing up further energy-related price pressures.

In the US, producer prices rose sharply in April.

The producer price index for final demand increased 1.4% month-on-month, according to the Bureau of Labor Statistics, up from 0.7% in March and 0.6% in February, marking the largest monthly rise since March 2022.

Final demand prices were 6.0% higher year-on-year, the strongest annual increase since December 2022.

Nearly 60% of April's increase came from a 1.2% rise in final demand services, while final demand goods prices climbed 2.0%.

Core PPI, excluding food, energy and trade services, rose 0.6% on the month and 4.4% year-on-year, both ahead of expectations.

"US producer prices might be on fire, but stock markets have taken it relatively well, perhaps waiting to see if today's figures feed through to the next round of CPI, or because investors continue to cross their fingers and hope that the US and Iran will somehow strike a bargain soon," Beauchamp said.

"The prospect of much hotter inflation could well spell doom for hopes of cutting rates anytime soon, resulting in the potential for some very awkward conversations between Trump and his new Fed chair."

Vistry, Adecco among the day's losers

In equity markets, Vistry slumped 12.34% after the UK housebuilder issued a profit warning and paused share buybacks.

Adecco dropped 16.67% after the recruiter published first-quarter results, while Merck surged 6.99% after its results and an upgrade to guidance.

Reporting by Josh White for Sharecast.com.