22nd Apr 2025 07:49
(Alliance News) - London's FTSE 100 was called higher on Tuesday following the long Easter weekend as the gold price reaches a new record high, while US investors remain cautious amid US President Donald Trump's threats to oust the Federal Reserve chair.
The yellow metal was up as high as USD3,500.12 earlier on Tuesday morning.
ING said: "Exchange-traded fund holdings in gold are at their highest levels since September 2023. In US dollar terms, though, this position is at a record high, given the strength in prices. Spot gold is up more than 30% so far this year, making it the best-performing commodity."
In early corporate news, DCC agrees to dispose of its Healthcare unit and Ricardo expects to deliver full-year results in line with market forecasts.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called up 0.7% at 8,332.46
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Hang Seng: up 0.8% at 21,567.39
Nikkei 225: closed down 0.1% at 34,242.23
S&P/ASX 200: closed up 0.7% at 7,812.60
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DJIA: closed down 971.82 points, or 2.5%, at 38,170.41
S&P 500: closed down 124.50 points, or 2.4%, at 5,158.20
Nasdaq Composite: closed down 415.55 points, or 2.6%, at 15,870.90
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EUR: up at USD1.1527 (USD1.1374)
GBP: up at USD1.3407 (USD1.3259)
USD: down at JPY140.15 (JPY142.19)
Gold: up at USD3,483.20 per ounce (USD3,296.43)
(Brent): down at USD66.67 a barrel (USD67.52)
(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 CEST eurozone government budget to GDP
11:00 CEST eurozone government debt to GDP
16:00 CEST eurozone consumer confidence
08:55 EDT US Redbook index
10:00 EDT US Richmond Fed manufacturing index
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US President Donald Trump and his administration are studying whether dismissing independent Federal Reserve Chair Jerome Powell is an option, his top economic aide said on Friday. "The president and his team will continue to study that matter," National Economic Council Director Kevin Hassett told reporters when asked if firing Powell was a possibility. Trump previously insisted that he could force out the Federal Reserve leader, lashing out after Powell warned of tariffs-fuelled inflation. Speaking to reporters at the White House, Trump said Powell would "leave if I ask him to." He added: "I'm not happy with him. I let him know it and if I want him out, he'll be out of there real fast, believe me." Earlier, in a scathing post on Truth Social, Trump repeated a demand for Powell to lower interest rates, saying his "termination...cannot come fast enough". Sources also told the Wall Street Journal that Trump has privately discussed firing Powell for months but has not made a final decision, and raised it during private meetings at Mar-a-Lago with former Fed Governor Kevin Warsh. The US president does not have direct authority to fire Federal Reserve governors, but Trump could initiate a lengthy process to attempt to unseat Powell by proving there was "cause" to do so.
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UK Prime Minister Keir Starmer will aim to strengthen the UK's defence ties with New Zealand as he hosts the country's prime minister on Tuesday. Starmer and his counterpart, Christopher Luxon, are expected to visit a military base to see British and New Zealand personnel train Ukrainian troops as part of the UK's Operation Interflex. More than 54,000 Ukrainians have already received training under Operation Interflex, and Luxon is expected to confirm on Tuesday that New Zealand will extend its support for the programme to the end of the year. In a further show of support for Ukraine, Starmer is expected to announce a deal worth GBP30 million for drones produced by SYOS Aerospace, a New Zealand company with a factory in Hampshire. The pair will also instruct their respective defence ministers to begin work on a new defence partnership between the UK and New Zealand, replacing the one signed in 2015. The UK and New Zealand already have long-standing defence links, with both nations belonging to the Five Eyes intelligence-sharing network and the Royal New Zealand Navy providing a frigate, HMNZS Te Kaha, for the UK carrier strike group due to set sail for the Indian Ocean from Portsmouth on Tuesday.
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The US on Monday announced its intention to impose tariffs of up to 3,521% on solar panels from Southeast Asia, a move aimed at countering alleged Chinese subsidies and dumping in the sector. The tariffs on companies from Cambodia, Thailand, Malaysia and Vietnam will still need to be ratified at a meeting of the International Trade Commission in June. The decision unveiled Monday comes after anti-dumping and countervailing duty investigations filed around a year ago by several US and other solar manufacturers. Those companies took aim at "unfair practices" that were said to have weighed on the US domestic solar market, particularly raising concern over Chinese-headquartered companies operating out of the Southeast Asian countries.
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China has warned other countries against making trade deals with the US to China's detriment. Governments including those of Taiwan, Japan and South Korea have begun negotiations with Washington after Trump announced sweeping tariffs against almost all of America's trading partners on April 2. The import taxes were quickly suspended against most countries after world markets panicked, but he increased his already steep tariffs against China. China's Commerce Ministry said in a statement: "China firmly opposes any party reaching a deal at the expense of China's interests. "If this happens, China will never accept it and will resolutely take countermeasures in a reciprocal manner. China is determined and capable of safeguarding its own rights and interests."
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The Trump administration sent mixed messages on the way forward as pressure mounts to reach a peace agreement in the Ukraine conflict. The US government will abandon efforts to secure a ceasefire in Ukraine if meaningful progress is not achieved within "a matter of days," Secretary Rubio said on Friday, as Washington and Kyiv agreed on a controversial minerals deal that is set to be concluded by April 26. "If it is not possible to end the war in Ukraine, we need to move on," Rubio told reporters before departing Paris, where he took part in high-level talks between Ukraine's European allies and representatives from Kyiv about the war on Thursday. Trump himself was vague when asked about a timeline. When asked at the White House on Friday, Trump said he wanted to see an agreement "very shortly". However, he did not specify how many days that meant. "No specific number of days, but quickly, we want to get it done," Trump asserted. At the same time, Trump made it clear that he had no interest in continuing US mediation efforts if both sides were unwilling to compromise.
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BROKER RATING CHANGES
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JPMorgan raises Sainsbury price target to 330 (305) pence - 'overweight'
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Berenberg raises Energean to 'buy' (hold) - price target 1,000 (940) pence
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Barclays raises Tate & Lyle to 'overweight' (equal weight) - price target 740 (750) pence
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COMPANIES - FTSE 100
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DCC agrees the sale of its Healthcare division at a total enterprise value of GBP1.05 billion to HealthCo Investment, an independently managed investment subsidiary of Investindustrial Advisors. DCC Healthcare recorded revenue of GBP859.4 million and adjusted operating profit of GBP88.1 million in the financial year that ended March 31, putting the disposal value at around 12 times higher than profit. Total net cash proceeds are expected at around GBP945 million. The disposal is due to complete in the third quarter of 2025 and is "a material step in simplifying DCC's operations and focusing on our high growth, high return, energy business", said DCC Chief Executive Officer Donal Murphy. The firm intends to use surplus cash from the sale to initiate a "significant return of capital" to shareholders.
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J Sainsbury launches the share buyback programme announced in its full-year results on Thursday for up to GBP200 million, to be completed by the end of its first half on September 12. BNP Paribas will conduct the programme on Sainsbury's behalf, and will repurchase a maximum of 239.1 million shares.
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OTHER COMPANIES
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Hutchmed China has completed the enrolment of the registration phase of its phase 2 trial of savolitinib in gastric cancer patients. The trial intends to evaluate the efficacy, safety and tolerability of savolitinib in treating gastric cancer or gastroesophageal junction adenocarcinoma patients with MET amplification. A total of 64 patients have been enrolled in the study. MET-driven gastric cancer currently has a "very poor" prognosis, Hutchmed notes, with the condition estimated to account for around 4% to 6% of all gastric cancer patients. Interim results from the study have shown a 45% objective response rate and a 50% objective response rate in patients with high MET gene copy number. The 4-month duration of response rate was 85.7% with a median follow up time of 5.5 months. China's National Medical Products Administration previously granted savolitinib with breakthrough therapy designation. If results are positive, Hutchmed may apply for marketing authorisation for savolitinib for gastric cancer in China in late 2025.
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Ricardo says it expects to deliver trading within the range of analyst expectations for its current financial year due to end June 30, as second-half cost reduction efforts have largely offset the "short-term order and currency volatility" that arose a result of market uncertainty. "This reflects the continued focus on prioritising growth in resilient end markets, delivering an efficient cost base and focused cash management," added Chief Executive Officer Graham Ritchie. Net debt is expected at the lower end of analyst guidance, before the impact of restructuring costs needed to deliver expense reductions. Ricardo anticipates at least an incremental GBP10 million in cost savings for financial 2026. The firm believes itself "well positioned to deliver significant value creation" for shareholders in the medium-term. In the past weeks, shareholder Science Group repeatedly criticised Ricardo's financial performance and demanded governance change. Science Group has a stake of 20.08% in Ricardo as of early April.
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By Emily Parsons, Alliance News reporter
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Sainsbury'sTate & LyleEnergean Oil & GasDCCHutchmedRicardoScience Group