2nd Apr 2025 07:50
(Alliance News) - London's FTSE 100 is called to open lower on Wednesday, hours before US President Donald Trump takes centre-stage on 'liberation day'.
Trump will announce sweeping new tariffs on Wednesday from 2100 BST.
The White House said that Trump, had "made a decision" but was still putting the finishing touches on the measures.
"Traders are now firmly in 'watch-and-react' mode," SPI Asset Management analyst Stephen Innes commented.
"There's no script for how reciprocal tariffs get priced, and uncertainty is the only constant."
Elsewhere, eyes will be on US labour market data. The ADP jobs report is released at 1315 BST, about 48 hours before the nonfarm payrolls.
In early UK corporate news, SSE announced new annual guidance, while Greencore said it has agreed to terms for a buy of Bakkavor. Elsewhere, Ryanair said it achieved a passenger number milestone.
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 0.3% at 8,607.70
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Hang Seng: down 0.2% at 23,166.42
Nikkei 225: up 0.1% at 35,666.85
S&P/ASX 200: up 0.1% at 7,934.50
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DJIA: closed down just 11.80 points at 41,989.96
S&P 500: closed up 0.4% at 5,633.07
Nasdaq Composite: closed up 0.9% at 17,449.89
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EUR: lower at USD1.0792 (USD1.0826)
GBP: lower at USD1.2914 (USD1.2920)
USD: higher at JPY149.80 (JPY149.33)
GOLD: lower at USD3,115.48 per ounce (USD3,126.52)
(Brent): lower at USD74.45 a barrel (USD74.74)
(changes since previous London equities close)
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ECONOMICS
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Wednesday's key economic events still to come:
11:00 BST Ireland unemployment
13:15 BST US ADP unemployment
15:00 BST US factory orders
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UK Prime Minister Keir Starmer and Chancellor Rachel Reeves will both face questions from MPs on Wednesday as Donald Trump prepares to announce major new tariffs that could derail their economic plans. The US president is expected to unveil sweeping tariffs at an event at the White House around 2100 BST, in a move he has dubbed "liberation day". Ministers are still hopeful of securing a deal with the US that would provide some protection from the import taxes, but Starmer acknowledged that "the likelihood is there will be tariffs" on UK exports. Before Trump's announcement, Starmer will face MPs at Prime Minister's Questions while the Commons Treasury Committee will grill the chancellor on last week's spring statement, but is sure to face questions about what the tariffs will mean for her plans. Economists at the Office for Budget Responsibility have warned that US tariffs could eliminate Reeves's "headroom" against her debt target, requiring more spending cuts or tax rises to meet the rules she has set herself, as well as knock up to 1% off the size of the economy. Meanwhile, analysis from the Institute for Public Policy Research, IPPR, suggested tariffs on car imports would put 25,000 UK jobs at risk and "completely destabilise the UK car manufacturing industry". Although a deal is unlikely to be reached before Trump's announcement, UK negotiators are reported to be pursuing an agreement with the US focused on technology.
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Western military leaders are set to discuss the possible deployment of troops to Ukraine on Friday, Ukrainian President Volodymyr Zelensky said. At a meeting in Kyiv with outgoing German Foreign Minister Annalena Baerbock, Zelensky stated that a small group of countries was willing to send contingents. The Ukrainian president had announced a meeting involving the chiefs of staff from France, the UK and Ukraine last Friday but had not specified when this would take place. France and the UK have signalled willingness to send troops as part of a so-called "coalition of the willing" to monitor a potential ceasefire. However, Russia has strongly opposed any Nato troop deployment, warning of further escalation. Germany has ruled out sending its forces. In his evening video address on Tuesday, Zelensky said discussions at Friday's meeting would also focus on a new security framework for Ukraine. "We are preparing detailed proposals regarding the contingents of our partners who could become part of the new security architecture. In fact, this is one of the security guarantees for Ukraine," Zelensky said. With Western backing, Ukraine has been defending itself against Russia's all-out invasion for more than three years.
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BROKER RATING CHANGES
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Berenberg starts Diageo with 'buy' - price target 2,372 pence
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RBC raises Rathbones to 'outperform' (sector perform) - price target 2,000 (1,850) pence
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JPMorgan starts YouGov with 'neutral' - price target 400 pence
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COMPANIES - FTSE 100
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Electricity generator SSE predicted annual earnings largely in line with the prior year, and said it saw a rise in renewables production. It now expects adjusted earnings per share for the year ended March 31 between 155 and 160 pence. The company had previously guided for an adjusted EPS between 154 and 163 pence. The top end of the new guidance would represent a 0.9% rise from 158.5p in financial 2024. SSE said renewables output is expected to have risen by 17% on-year, "reflecting capacity additions and variable weather conditions". SSE reaffirmed its target of 175 to 200p adjusted earnings per share for financial 2027.
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COMPANIES - FTSE 250
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Greencore said it has reached an "agreement in principle" for a takeover of Bakkavor. Under the terms of the possible offer, the convenience food maker will pay 85 pence in cash and 0.604 of a Greencore share per Bakkavor share. In addition, Bakkavor shareholders would have retained the right to a final dividend of 4.8p per share. Exclusive of the final dividend, it implies a value of 200p per share in fresh food maker Bakkavor, and valuing the issued and to be issued share capital as a whole at around GBP1.2 billion. Greencore said Bakkavor "would be minded to unanimously recommend" the deal to shareholders. "Greencore shareholders would own approximately 56% and Bakkavor shareholders would own approximately 44% of the combined group," Greencore said. "In addition, Bakkavor shareholders will receive a contingent value right such that should there be a disposal of Bakkavor's US business, Bakkavor shareholders would be entitled to potential additional value if signing of a US disposal occurs no later than 30 June 2026 or a US disposal completes within 12 months of completion of the possible offer." Greencore in March confirmed it had made two takeover approaches to Bakkavor. The first proposal was made on February 25, then rejected by the Bakkavor board on February 27. The second proposal was for 85p in cash and 0.523 of a Greencore share. Inclusive of the final dividend, it implied a 189p valuation per Bakkavor share, GBP1.14 billion overall. Greencore said a tie-up would create a firm with combined revenue of GBP4 billion. Greencore has until April 11 to announce whether it will make a firm offer for Bakkavor.
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Chemring Group said it has won a "strategically important" multi-year missile defence contract with the UK Ministry of Defence. The provider of technology products and services to the aerospace, defence and security markets said the deal secured by its Roke unit is valued at GBP251 million over six years and begins "immediately". "We are delighted that Roke has been trusted to deliver STORM for the UK MDC. In today's complex and changing security environment effective missile defence is crucial to protecting the UK's interests. This contract recognises Roke's heritage in helping customers solve complex problems, and places Roke at the heart of the UK's missile defence research and development activities," Chemring Chief Executive Michael Ord said.
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Low cost computing firm Raspberry Pi reported a decline in annual earnings, but expects a "steady build-up in demand". Pretax profit in 2024 fell 57% to USD16.3 million from USD38.2 million in 2023. Revenue declined 2.4% to USD259.5 million from USD265.8 million. It did not pay a dividend, with the medium-term expectation being that "cash generated will be reinvested into the business". The firm said: "With channel inventory now normalised, Raspberry Pi anticipates a steady build-up in demand throughout the year, positioning us strongly despite ongoing macroeconomic and geopolitical uncertainties. The projected pace of market recovery, coupled with the timing of embedded design wins, strengthens confidence in solid and sustainable sales growth in full-year 2025." The firm listed back in June. Shares have risen 69% from its 280p IPO price.
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OTHER COMPANIES
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Grafton Group will fork out EUR31.6 million to acquire HSS Hire's Ireland operation. Building materials distributor Grafton will buy the tool and equipment hire unit, which has four customer distribution centres in Ireland, on a cash and debt free basis. HSS said the sale of HSS Hire Ireland follows the company separating its ProService and Operations offerings, now called The Hire Service Co. That move was made to "provide the board with additional optionality to maximise future value for shareholders". The Ireland deal will allow HSS to "continue to focus on driving the long-term performance of these two standalone businesses". Proceeds will go towards strengthening its balance sheet. Grafton CEO Eric Born said: "We are pleased to have agreed to acquire HSS Hire Ireland which is a well-respected tool and equipment hire business and brand with a strong and experienced management team. This transaction is in line with Grafton's strategy to strengthen our market positions in existing and adjacent markets and will broaden the offering of our Chadwicks business in the Republic of Ireland where we continue to see compelling opportunities for further growth." Grafton noted HSS Hire Ireland achieved adjusted unaudited revenue of EUR31.9 million in the financial year to December 28.
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Ryanair said it became the first airline in Europe to carry 200 million passengers over a one-year stretch. The budget carrier said passenger numbers in the 12 months ended March rose 9% annually to 200.2 million. Passengers numbers last month alone rose 10% on-year to 15.0 million. FTSE 250 listed Wizz Air also reported March traffic numbers. It said passenger numbers from 6.4% on-year last month to 5.1 million. On a rolling 12-month basis, it was 2.2% higher at 63.4 million.
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By Eric Cunha, Alliance News news editor
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DiageoRathboneYouGovSSEGreencoreBakkavorChemringRaspberry PiRYA.LWizz AirHss HireGrafton Group