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(Alliance News) - The FTSE 100 was called down on Tuesday following news that the US government is moving forward with planned tariffs of up to 25% against China, Canada and Mexico.
US stocks "took a swan dive straight into the plunge tank, rattled by President Trump's latest tariff bombshell," as SPI's Stephen Innes put it.
"With levies on Canada and Mexico set to kick in on Tuesday, investors hit the panic button, sending stocks into a tailspin," Innes commented, adding: "With investors already on edge, the last thing Wall Street needed was another round of economic headwinds. Risk appetite has been put in a chokehold—and it's tightening. Trump's tariff wrecking ball isn't just smashing into Canada, Mexico, and China—it's now barreling straight for Europe."
He continued: "The spectre of a full-blown trade war is once again looming, threatening to choke global economic growth just as investors were starting to regain confidence."
In corporate news, Mexico-focused precious metals producer Fresnillo announced increased revenue and gold production, while pretax profit soared to almost USD744 million in 2024.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called down 41.2 points, 0.5%, at 8,830.11
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Hang Seng: down 0.1% at 22,990.37
Nikkei 225: down 1.2% at 37,331.18
S&P/ASX 200: down 0.6% at 8,198.10
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DJIA: closed down 649.67 points, 1.5%, at 43,191.24
S&P 500: closed down 1.8% at 5,849.72
Nasdaq Composite: closed down 2.6% at 18,350.19
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EUR: lower at USD1.0488 (USD1.0498)
GBP: lower at USD1.2701 (USD1.2710)
USD: lower at JPY149.46 (JPY150.20)
GOLD: lower at USD2,887.87 per ounce (USD2,888.92)
OIL (Brent): lower at USD71.03 a barrel (USD72.59)
(changes since previous London equities close)
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ECONOMICS
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Tuesday's key economic events still to come:
11:00 CET eurozone unemployment
08:45 CET France budget balance
10:30 CET France new car registrations
11:00 GMT Ireland construction output
10:00 CET Italy unemployment
11:30 SAST South Africa GDP
09:00 CET Spain unemployment
08:55 EST US Redbook index
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UK food prices have risen at their third fastest monthly rate in a year amid hikes in the cost of butter, cheese, eggs and bread, figures show. The price of other breakfast staples including cereals and coffee are also continuing to soar, taking food inflation to 2.1% in February, a jump from January's yearly growth of 1.6%, according to the British Retail Consortium-NIQ shop price index. Fresh food prices are now 1.5% higher than a year ago, also a hike from January's 0.9%, while ambient food inflation increased to 2.8% from 2.5% in January. BRC Chief Executive Helen Dickinson said: "While shop prices remained in deflation in February, prices on the month saw the biggest increase in the last year." The BRC has already said it expects food inflation to hit 4% by the second half of the year amid geopolitical tensions and the imminent GBP7 billion increase in costs from the autumn budget.
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Most smaller UK manufacturers want to grow their business but face barriers including access to finance and skills shortages, according to a new report. Make UK said the economy could receive a multibillion-pound boost over the next decade if Britain's small to medium-sized manufacturers achieve their growth ambitions. The business group urged the government to introduce measures such as a "super-growth allowance" to help deliver the growth. Make UK chief executive Stephen Phipson said: "Using [artificial intelligence] to leverage the wealth of data available in the UK to micro-target SMEs at exactly the right moment of their growth journey, where they will be most receptive to and benefit from the types of support to boost scale-up success, will dramatically deliver quick-fire growth across the whole of the UK. The report was published ahead of a Make UK conference in London on Tuesday.
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US Vice President JD Vance accused Ukraine's President Volodymyr Zelensky of "needling" Donald Trump and having a "certain sense of entitlement" as the US president paused aid to Ukraine. The development comes as Trump seeks to pressure Zelensky into committing to peace talks with Russia, following their tense confrontation in the Oval Office last week. Vance said the encounter, which happened in front of the media, "really set Zelensky off". "He showed a clear unwillingness to engage in the peace process that President Trump said is the policy," he said. "That's the real breakdown. I think Zelensky wasn't yet there. And frankly, still isn't there. But I think he'll get there eventually, he has to." Vance confirmed Ukrainian officials made at least one attempt to restart negotiations after leaving the White House, but efforts were shut down by Trump. He also used the interview as an opportunity to criticise Europe's approach to free speech, saying governments wanted to "silence and shut down" free speech in response to criticism over immigration. UK Defence Secretary John Healey is expected to visit the US later this week for talks with his counterpart Pete Hegseth, following Prime Minister Keir Starmer restating his call for "strong US backing" for any European-led peacekeeping force in Ukraine.
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China's largest political event of the year begins in Beijing on Tuesday, as US tariffs cast a cloud over closed-door meetings involving thousands of delegates from across the country. The meetings, known as the "Two Sessions", are concurrent gatherings of China's rubber-stamp parliament and a separate political advisory body. While voting is tightly controlled and legislation is pre-approved by the Communist Party, the political gathering will offer a rare glimpse into the leadership's priorities while facing an unpredictable US. Proceedings kick off Tuesday at 1500 BJT, 0700 GMT, with the opening ceremony of China's People's Political Consultative Conference, CPPCC, – likely attended by President Xi Jinping and other party top brass. Tuesday's CPPCC is relatively low-stakes compared to the near-simultaneous gathering of the country's legislature, the National People's Congress, NPC, which starts Wednesday. During the NPC's opening session, Premier Li Qiang will deliver a speech expected to unveil economic targets as China faces sluggish growth and a widening trade war with the US. Analysts polled by AFP broadly agreed that Beijing will set a goal of around five percent growth – the same as 2024. Observers say this is an ambitious goal given the economic headwinds China is facing.
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BROKER RATING CHANGES
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HSBC raises Halma to 'hold' - price target 2,760 pence
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HSBC raises Spectris to 'buy' - price target 3,200 pence
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JPMorgan raises Kingspan price target to 74 (69) EUR - 'neutral'
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COMPANIES - FTSE 100
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Fresnillo announced its results for 2024. Total revenue rose 29% on-year to USD3.50 billion from USD2.71 billion, with silver production slightly up at 56.3 million ounces and gold production rising 3.4% to 631,573 ounces from 610,646 ounces. Pretax profit soared to USD743.9 million from USD114.0 million. Fresnillo declared a final dividend of 26.1 US cents per share, bringing the total 2024 payout to 32.5 cents, and a 41.8 cents special dividend. For 2025, Fresnillo expects silver production between 49.0 million and 56.0 million ounces and gold production of 525,000 to 580,000 ounces. "I am pleased to report a solid financial performance for Fresnillo in 2024, underpinned by higher precious metal prices, operational discipline, and a continued focus on cost efficiencies," commented Chief Executive Officer Octavio Alvidrez.
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Beazley reported "record profit" in its 2024 results. Pretax profit increased 13% to USD1.42 billion from USD1.25 billion the year before, while insurance written premiums increased 10% to USD6.16 billion from USD5.60 billion. Beazley is also rebasing its dividend by 76% to 25.0 pence per share. Furthermore, the insurer announced a USD500 million share buyback. Looking ahead, CEO Adrian Cox commented: "The industry continues to navigate an active claims environment, including recent natural catastrophe activity which could result in the pricing outlook evolving. However our central expectation at this time is that prices will continue to soften this year, and we are forecasting mid-single digit growth for 2025. Accounting for the provision already made in respect of the January 2025 Wildfires, we expect to deliver a mid-80s undiscounted combined ratio."
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COMPANIES - FTSE 250
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For the year ended December 28, Greggs announced "strong progress, with milestone £2 billion sales and record profits". Total sales rose 11% to GBP2.01 billion from GBP1.81 billion, and company-managed shops' sales rose 5.5% on a like for like basis. Pretax profit rose 8.3% to GBP203.9 million from GBP188.3 million. The total dividend for the year increased 11% to 69.0p from 62.0p, including a final dividend of 50.0p. Greggs expressed confidence that it "can manage inflationary headwinds and deliver another year of progress in 2025", noting that LFL sales in company-managed shops increased by 1.7% year-on-year in the first nine weeks of this year. "In 2021, we set our sights on doubling sales by 2026 and having a significantly bigger business over the longer term," noted CEO Roisin Currie. "Three years into this five-year plan, sales are on track and we continue to be confident in the growth opportunity in front of us."
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FTSE Russell announced changes to inclusion thresholds for its key indices, paving the way for non-sterling denominated shares to be included in the blue-chip and mid-cap benchmarks. From September, shares which trade in euros and US dollar are "to be considered for potential inclusion to the FTSE UK Index Series", the index operator said. "Currently, the FTSE UK Index Eligibility Criteria specifies that only securities trading in Sterling are eligible for inclusion to the FTSE UK Index Series. Inclusion will still require a UK nationality and a listing on the Equity Shares (Commercial Companies) or Closed-ended investment fund categories, as set out in the FTSE UK Index Series ground rules. As things stand, there are no companies immediately eligible for inclusion on the effective date of this change to the inclusion criteria. However, the actual and longer-term impact to the composition of the indices will be guided by changes to the underlying market and specifically index eligible securities opting to trade in euros or US dollars," FTSE Russell said. In addition, FTSE Russell said it will "lower the fast entry thresholds" for the FTSE UK Index Series. It would allow for new listings to enter the FTSE 100 or 250 days after their initial public offering if they are large enough. "If a company listing on the London Stock Exchange ranks 225th or above based on the close price on the first day of unconditional dealings, and has an investable market capitalisation of GBP1 billion, then the company, if otherwise eligible, will be placed in the FTSE 100 or FTSE 250, as appropriate, after the close on its fifth day of trading. Concurrently, the lowest rank constituent will be deleted from the applicable index and associated membership changes implemented," FTSE Russell said.
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OTHER COMPANIES
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Seplat said it made "strong operational and strategic progress in 2024". Revenue for that year rose 5.2% to USD1.12 billion from USD1.06 billion, while pretax profit surged 98% to USD379.4 million from USD191.2 million. The total dividend rose 10% to 13.2 US cents per share, including a 3.6 cents dividend for the fourth quarter. Seplat also recommends a 3.3 cents special dividend, "reflecting the strength of balance sheet and confidence in our outlook". For 2025 it expects the total payout to rise by 10% again to 16.5 cents. Also for this year, Seplat guided for average production of 120,000 to 140,000 barrels of oil equivalent per day, including up to 56,000 boepd from Seplat Onshore. For 2024 working interest production rose 11% to 52,947 boepd from 47,758 boepd.
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Marston's announced the upcoming departure of Chief Financial Officer Hayleigh Lupino, who intends "to pursue a new opportunity outside of the group". Previously the finance director, Lupino was promoted to CFO in July 2021. She will stay on as CFO for the remainder of the financial year until October 2025 "to ensure a smooth transition while her successor is appointed", Marston's said. It added that the process to recruit her successor is underway.
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Taiwanese chip-making titan TSMC will invest at least USD100 billion in the US to build "cutting edge" manufacturing facilities, President Donald Trump said on Monday, announcing the latest blockbuster financial pledge by a private company since his return to office. Taiwan Semiconductor Manufacturing Co's new investment will come on top of their existing commitments and will go into "building five cutting edge fabrication facilities," Trump said during a White House event, flanked by TSMC Chief Executive CC Wei. He added that much of the funding would be invested in the US state of Arizona, where TSMC – the world's largest chipmaker – has already invested heavily, and would create "many thousands" of high-paying jobs. TSMC has long faced demands to move more of its production away from Taiwan, amid fears that supplies of the critical technology could be disrupted in any conflict with Beijing. The company pledged during former president Joe Biden's administration to invest more than USD65 billion in three factories in Arizona, one of which began production in late 2024. Trump recently ratcheted up the pressure on TSMC and other chip manufacturers by publicly mulling the introduction of 25% tariffs on all semiconductor chips made outside the US.
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Saudi Arabian Oil on Tuesday said net profit dropped 12% to USD106.25 billion in 2024, following a year of lower prices and output cuts. The world's biggest oil exporter, known as Saudi Aramco, said in a statement the profit decline was due to lower revenue, "primarily attributable to lower prices and volumes sold of crude oil, as well as lower refined and chemical product prices".
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By Emma Curzon, Alliance News reporter
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