11th Apr 2025 07:49
(Alliance News) - London stocks were called to open higher on Friday, but "trade war uncertainties" continue to haunt market participants.
US stocks closed lower as "mood in the US turned increasingly sour and led to another wave of selloff as the trade war escalated with China", Swissquote's Ipek Ozkardeskaya noted.
"The futures are slightly positive this morning but note that the US selloff accelerated after the European close so there should be a certain catch-up today," she continued. "Broadly the direction remains pretty clear – big jumps are as disquieting as big selloffs; a 3-4% rebound for an index is hardly sustainable when investors remain worried about the trade war uncertainties, the potential impact on the economic growth, on inflation and on jobs."
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 87.2 points, 1.1%, at 8,000.45
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Hang Seng: up 1.7% at 21,038.07
Nikkei 225: down 2.8% at 33,637.77
S&P/ASX 200: down 0.8% at 7,646.50
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DJIA: closed down 1,014.79 points, 2.5% at 39,593.66
S&P 500: closed down 3.5% at 5,268.05
Nasdaq Composite: closed down 4.3% at 16,387.31
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EUR: higher at USD1.1263 (USD1.1195)
GBP: higher at USD1.2996 (USD1.2965)
USD: lower at JPY143.89 (JPY144.41)
GOLD: higher at USD3,200.90 per ounce (USD3,069.25)
OIL (Brent): higher at USD63.95 a barrel (USD63.32)
(changes since previous London equities close)
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ECONOMICS
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Friday's key economic events still to come:
11:45 CEST eurozone European Central Bank president Christine Lagarde speaks
14:45 CEST Germany current account
07:00 BST UK trade balance
07:00 BST UK industrial production
UK Delphi Economic Forum
08:30 EDT US PPI
10:00 EDT US Michigan consumer sentiment index
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The Bank of England said it was postponing a sale of long-term government bonds until at least July, citing "recent market volatility". The central bank did not elaborate, but financial markets worldwide have seen chaotic swings in recent days as investors react to Trump's ever-changing US tariffs against trading partners around the world. Heavy selling of 30-year UK government bonds saw their yield – representing the cost nations have to pay to borrow money – hit their highest level since 1998 on Wednesday, at over 5.6%. US Treasuries also saw massive selling in response to Trump's tariff plans, which have sparked fears of a trade war that could hammer economic growth worldwide. Instead of selling GBP600 million of long-term bonds as planned next Monday, the BoE will sell GBP750 million of short-term paper. Long-term bonds will be sold in "the following quarter", the bank said in a statement, adding that it "reserves the right to amend its schedule, including the gilts to be sold and the size of its auctions".
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Trump's tariff policy has caused a "marked increase" in the risks of higher inflation and slower growth, a senior Federal Reserve official said Thursday, adding he would prioritise tackling inflation. "Relative to earlier this year... it appears as though we have seen a marked increase in the upside risks around inflation along with elevated downside risks to the outlook for employment and growth," Kansas City Fed President Jeff Schmid told an event in the city. "Based on what I have heard from our business contacts, there is a growing possibility that in setting policy the Fed will have to balance inflation risks against growth and employment concerns," he said. "When contemplating this balance, I intend to keep my eye squarely focused on the outlook for inflation," added Schmid, who is a voting member of the Fed's rate-setting committee this year. Schmid also warned of the potential for tariffs to have a long-lasting impact on inflation.
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US tariffs on Chinese imports have been raised to 145%, not 125% as the White House had previously announced, a member of the US administration said on Thursday. The earlier 125% figure did not include the previously announced 20% tariff aimed at curbing imports of the deadly drug fentanyl, the administration explained.
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The UK government has announced a GBP450 million "surge" of military support to Ukraine. The Ministry of Defence said the "major" new military support package will be delivered by British and Ukrainian suppliers to help boost Ukraine's armed forces as they continue to defend against Russian attack. The package, worth GBP450 million, includes GBP350 million from the UK, with further funding being provided by Norway, via the UK-led International Fund for Ukraine. It will include GBP160 million of UK funding to provide repairs and maintenance to vehicles and equipment the UK has already provided to Ukraine – partnering UK companies with Ukrainian industry. The package also includes a "close fight" military aid package – with funding for radar systems, anti-tank mines and hundreds of thousands of drones worth more than GBP250 million.
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UK retail footfall declined sharply in March as the late timing of Easter this year skewed year-on-year comparisons and weighed on shopper numbers. According to the latest British Retail Consortium-Sensormatic data, total footfall across UK retail destinations fell by 5.4% in March compared to the same month last year, reversing the slight 0.2% rise seen in February. High street visits were down 4.0%, retail parks slipped 1.2%, and shopping centre footfall declined 5.8%. The BRC said the shift of Easter into April this year exaggerated the drop, as last year's earlier Easter boosted March footfall. "Footfall in March could not compare to last year when families were already enjoying their Easter holidays," said Helen Dickinson, chief executive of the BRC. "Retail Parks held up better than other locations… while London saw only a minor dip."
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It would take an "extraordinary deal" for the UK to improve on the 10% tariff Trump has placed on the country, an adviser to the president suggested. Prime Minister Keir Starmer's government still hopes an economic deal with the US can be reached to soften the blow of tariffs. Kevin Hassett, a senior economic adviser to Trump, said any deal that would persuade the president to go below that would need to be "extraordinary". "I think everybody expects that the 10% baseline tariff is going to be the baseline," he told CNBC.
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BROKER RATING CHANGES
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Exane BNP raises BT to 'neutral' (underperform) - price target 140 (110) pence
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Barclays starts JTC with 'overweight' - price target 1,120 pence
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Peel Hunt raises Mears Group to 'buy' (add) - price target 405 (380) pence
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COMPANIES - FTSE 100
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BP released a trading update, saying it expects upstream production in the first quarter of 2025 to be lower compared to the prior quarter. Production should be slightly higher in oil production & operations and lower in gas & low carbon energy including the already announced divestments in Egypt and Trinidad completed towards the end of the prior quarter, it added. It expects realisations in the gas & low carbon energy segment to be "broadly flat" on-quarter, with a "weak" gas marketing and trading result. "In the oil production & operations segment, realisations, compared to the prior quarter, are expected to be broadly flat including the impact of price lags on BP's production in the Gulf of America and the UAE," it added. BP also said Brent for the first quarter averaged USD75.73 per barrel, against USD74.73 per barrel in the fourth quarter.
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Diageo announced the launch and pricing of a two-tranche USD1.5 billion fixed rate bond offering, consisting of USD750 million 5.125% fixed rate notes due 2030 and USD750 million 5.625% fixed rate notes due 2035. The offering is scheduled to settle on Tuesday. It said Barclays Capital, BNP Paribas Securities, BofA Securities, Deutsche Bank Securities, and Goldman Sachs & Co LLC have been appointed as active joint book‐running managers. Diageo said it will use proceeds from the offering, with the bonds issued by Diageo Investment Corp, for general corporate purposes.
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COMPANIES - FTSE 250
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Bakkavor announced an extension of the deadline for Greencore Group to make a firm takeover offer or decline to make one, until May 9 instead of Friday. Bakkavor and Greencore announced last week they had reached an agreement in principle on the key financial terms of a possible cash and share offer by Greencore for Bakkavor.
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OTHER COMPANIES
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Helical said it and a vehicle managed by Orion Capital Managers have exchanged contracts with an undisclosed party for the forward sale of Helical Bicycle 3 Ltd, the corporate entity that owns 100 New Bridge Street, London, for their occupation. It said the forward sale, which has a net price of GBP333 million with a GBP166.5 million share for Helical, will complete on practical completion of the building, which is expected in April 2026. "The purchaser is an S&P 500 listed global business, with net assets of over USD10 billion and is rated A to AA category rating across three agencies," Helical added. It estimates that consideration of GBP104 million in total will be payable for the Helical Bicycle 3 shares.
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Optima Health has agreed to acquire Cognate Health Ltd for total consideration of up to EUR9 million, with EUR7 million payable on completion followed by earn-out consideration of up to EUR2 million. It explained: "The acquisition will expand Optima Health's geographic reach, creating a base in the Republic of Ireland...The deal will also expand Optima Health's customer base and strengthen its ability to service multinational clients with operations in the UK and Ireland. Alongside this, the acquisition brings additional clinical capabilities with approximately 60 experienced employees, and a substantial network of 35 occupational health physicians to support business growth in this new jurisdiction. There will be cross-selling opportunities, in addition to revenue synergies." Optima added that it sees significant opportunities to accelerate growth, and will continue to evaluate bolt-on acquisitions and consolidation opportunities.
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By Emma Curzon, Alliance News reporter
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