1st Apr 2025 07:43
(Alliance News) - London's FTSE 100 is called to open higher, recovering some lost ground on the eve of a key day as far as US tariffs go.
US President Donald Trump said Monday he would be "very kind" to trading partners when he unveils further tariffs this week, risking global turmoil to address what he says are unfair trade imbalances.
Trump – who has been making unprecedented use of presidential powers since taking office in January – said he could announce as early as Tuesday night exactly what "reciprocal tariffs" will be imposed.
The Republican billionaire insists that reciprocal action is needed because the world's biggest economy has been "ripped off by every country in the world," promising "Liberation Day" for the US.
He could also unveil more sector-specific levies.
Asked for details, he told reporters Monday: "You're going to see in two days, which is maybe tomorrow night or probably Wednesday."
Pepperstone analyst Michael Brown commented: "Tariffs will, unsurprisingly, remain centre stage today, as we inch ever closer to 'liberation day' tomorrow.
"On the data front, today is all about manufacturing PMI surveys. This afternoon's US ISM manufacturing survey stands as the most notable release, with the index seen falling back into contractionary territory, at 49.5. Focus will also fall on the employment sub-index, and on the February [job openings and labour turnover survey] report, ahead of the March jobs report due on Friday."
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 0.5% at 8,628.71
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Hang Seng: up 0.3% at 23,179.07
Nikkei 225: down 0.1% at 35,580.14
S&P/ASX 200: up 1.0% at 7,925.20
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DJIA: closed up 417.86 points, 1.0%, at 42,001.76
S&P 500: closed up 0.6% at 5,611.85
Nasdaq Composite: closed down 0.1% at 17,299.29
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EUR: flat at USD1.0801 (USD1.0801)
GBP: higher at USD1.2917 (USD1.2904)
USD: flat at JPY149.87 (JPY149.85)
GOLD: higher at USD3,138.04 per ounce (USD3,116.44)
(Brent): higher at USD74.93 a barrel (USD74.42)
(changes since previous London equities close)
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ECONOMICS
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Tuesday's key economic events still to come:
09:00 BST eurozone manufacturing PMI
10:00 BST eurozone CPI
10:00 BST eurozone unemployment
13:30 BST eurozone European Central Bank president Christine Lagarde speaks
08:55 BST Germany manufacturing PMI
09:15 BST UK Bank of England Monetary Policy Committee member Megan Greene speaks
09:30 BST UK manufacturing PMI
14:45 BST US manufacturing PMI
15:00 BST US ISM manufacturing PMI
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UK food inflation continued to edge up in March, despite retailers doing "all they can" to avert pressures bearing down on the industry, figures show. Food prices overall are now 2.4% higher than last March, up from 2.1% in February and above the three-month average of 2%, according to the British Retail Consortium-NIQ shop price index. Ambient food inflation saw the biggest increase, to 3.7% from February's 2.8%, with alcoholic and non-alcoholic beverages both recording price increases because of duty changes and the hangover from high global sugar prices. Fresh food prices are 1.4% higher than a year ago, a slight dip from February's 1.5%. Shop prices overall are 0.4% cheaper than last March, a slowing on last month's 0.7% decline, driven by clothing and footwear falling into double digit deflation as a result of weak consumer demand.
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UK annual house price growth was steady in March, numbers from mortgage lender Nationwide said. House prices rose 3.9% on-year last month, the same pace of growth as in February, Nationwide explained. On a monthly basis, prices were flat in March from February. They had risen 0.4% in February from January. "These price trends are unsurprising, given the end of the stamp duty holiday at the end of March (transactions associated with mortgage approvals made in March, especially toward the end of the month, would be unlikely to complete before the deadline)," Nationwide analyst Robert Gardner said. "Indeed, the market is likely to remain a little soft in the coming months since activity will have been brought forward to avoid the additional tax obligations – a pattern typically observed in the wake of the end of stamp duty holidays. Nevertheless, activity is likely to pick up steadily as the summer progresses, despite wider economic uncertainties in the global economy, since underlying conditions for potential home buyers in the UK remain supportive."
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Ireland's manufacturing sector continued to expand in March, figures from S&P Global showed on Tuesday. The AIB Ireland manufacturing purchasing managers' index eased to 51.6 in March, down from 51.9 in February. A reading above the 50.0 neutral mark indicates an overall increase in business activity from the previous month, while a reading below signals a contraction. The latest reading marks the third successive month of growth in the sector. David McNamara, AIB chief economist, said: "The rise in March was broadbased, with stronger growth in output and new orders, and a renewed upturn in exports. "Output rose robustly in March, amid a general rebound in demand conditions. This was reflected in accelerated growth in new orders to a 3-year high, and a first rise in export orders since January 2024."
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The Reserve Bank of Australia said it will keep its cash rate target unchanged, and cautioned that inflation "could move in either direction". It kept the interest rate at 4.10%, which was expected by analysts. It had cut by 25 basis points in February. Australia's central bank said underlying inflation was moderating, having fallen substantially since a peak in 2022. The bank said inflation "could move in either direction". "Many central banks have eased monetary policy since the start of the year, but they have become increasingly attentive to the evolving risks from recent global policy developments," the RBA said. "Uncertainty about the outlook abroad also remains significant. On the macroeconomic policy front, recent announcements from the US on tariffs are having an impact on confidence globally and this would likely be amplified if the scope of tariffs widens, or other countries take retaliatory measures. Geopolitical uncertainties are also pronounced. These developments are expected to have an adverse effect on global activity, particularly if households and firms delay expenditures pending greater clarity on the outlook."
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BROKER RATING CHANGES
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Goldman Sachs raises Airtel Africa price target to 145 (127) pence - 'neutral'
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COMPANIES - FTSE 100
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Mondi sealed the acquisition of some assets from Schumacher Packaging. It has sealed the buy of Western Europe packaging assets from the Bavaria-based firm. "Complementing Mondi’s existing network of corrugated solutions plants across Central and Eastern Europe, the acquired corrugated converting and solid board operations in Germany, Benelux and UK will add over 1 billion square meters of capacity when fully operational. This includes two state-of-the-art mega box plants located at Ebersdorf and Greven (Germany), which have best-in-class production speed and operational efficiency, and offer significant growth potential following a recent investment programme," Mondi said. The EUR634 million deal had been announced in October.
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COMPANIES - FTSE 250
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Convenience food maker Greencore said "strong revenue and volume momentum" continued in its second-quarter. The firm raised its guidance for the year that ends on September 26. "Profit conversion during Q2 was ahead of management's expectations and underpinned by on-going operational and commercial excellence initiatives and a continued focus on cost control," Greencore said. Greencore now expects adjusted operating profit to be ahead of current market expectations, and in the range of GBP112 million and GBP115 million. It would represent a rise of as much as 18% from GBP97.5 million in financial 2024. Greencore releases results for the half-year to March 28 on May 27.
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Builders' merchant Travis Perkins reported a swing to an annual loss, and its chair said there are a "number of areas where the business needs to refocus". Travis Perkins reported a pretax loss of GBP38.4 million in 2024, swinging from profit of GBP121.4 million in 2023. Revenue declined 4.7% to GBP4.61 billion from GBP4.84 billion. Also hurting its bottom line were GBP139 million worth of adjusting items, rising markedly from GBP27 million a year prior. These included a branch impairment of GBP63 million, and a GBP33 million impairment at the Staircraft business. Chair Geoff Drabble said: "Since joining the board of Travis Perkins, I have been encouraged by the breadth and depth of our market footprint, the quality and commitment of our people and the strength of our relationships within the construction industry. However, it is clear to the management team that there are a number of areas where the business needs to refocus and change the way it operates in order to better serve our customers and effectively support our suppliers. Several initial steps have been taken under Pete Redfern's leadership to begin rebuilding trust and confidence, both internally and externally, with focused leadership roles restored in all our businesses and actions taken to re-engage and motivate our teams." Travis Perkins last month said Redfern left the CEO role due to ill health. Drabble became chair in October. Travis Perkins raised its final dividend by 64% to 9.0 pence per share from 5.5p. Its total dividend amounted to 14.5p, lowered by 19% from 18.0p. Looking to 2025, it said: "The group has experienced a mixed start to 2025. Trading conditions have continued to be challenging in our Merchanting businesses with pricing now stabilised but volumes in modest decline. By contrast, Toolstation has started the year more positively and continues to deliver good growth. It is encouraging to see a more robust demand backdrop for some elements of the construction market. However, the pace and rate of an overall recovery in construction activity levels remains uncertain and will likely need further cuts to interest rates and an uplift to consumer confidence levels to stimulate a meaningful increase in demand." Adjusted operating profit excluding property profits for the new year is expected to be "broadly" in line with 2024's GBP141 million. It had fallen 23% from the GBP183 million achieved in 2023.
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OTHER COMPANIES
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Investment bank Peel Hunt said it had a tricky second half of the financial year, as tough market conditions weighed on corporate activity, though it noted an "encouraging pipeline" ahead. Revenue of around GBP90 million is expected to for the financial year to March 31, rising around 4.9% from GBP85.8 million the year prior. "This followed a challenging second half with a number of macro-economic events that weighed on market volumes and corporate activity. During the year we took action to reduce costs, and we expect to deliver a smaller loss before tax than market expectations," Peel added. "Against a backdrop of continuing slow market conditions, we have an encouraging pipeline of investment banking transactions across both mergers & acquisitions and initial public offerings. A number of announced M&A transactions are expected to complete in the first quarter of our new financial year." It plans to release annual results on June 16.
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By Eric Cunha, Alliance News news editor
Comments and questions to newsroom@alliancenews.com
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Airtel AfricaMondiGreencoreTravis PerkinsPeel Hunt