5th Feb 2025 07:49
(Alliance News) - European blue-chips are set for a softer open, as the equity market continues to be marred by trade tensions this week.
In one of the latest developments, the US Postal Service said Tuesday it was temporarily suspending inbound parcels from China and Hong Kong, shortly after President Donald Trump's imposition of fresh tariffs targeting Beijing.
The halt will take place "until further notice," and follows Trump's order for an additional 10% levy on Chinese imports starting Tuesday.
Elsewhere, gold traded at another record high as trade tensions continue to boost demand for the precious metal.
In early UK corporate news, GSK announced a buyback and upped its 2031 sales target.
Here is what you need to know at the London market open:
----------
MARKETS
----------
FTSE 100: called down 0.3% at 8,542.57
----------
Hang Seng: down 1.0% at 20,576.73
Nikkei 225: up 0.1% at 38,831.48
S&P/ASX 200: up 0.5% at 8,416.90
----------
DJIA: closed up 134.13 points, 0.3%, at 44,556.04
S&P 500: closed up 0.7% at 6,037.88
Nasdaq Composite: closed up 1.4% at 19,654.02
----------
EUR: up at USD1.0408 (USD1.0376)
GBP: up at USD1.2503 (USD1.2481)
USD: down at JPY153.18 (JPY154.58)
GOLD: higher at USD2,861.92 per ounce (USD2,840.78)
(Brent): lower at USD75.83 a barrel (USD76.19)
(changes since previous London equities close)
----------
ECONOMICS
----------
Wednesday's key economic events still to come:
09:00 GMT eurozone composite PMI
10:00 GMT eurozone PPI
08:55 GMT Germany composite PMI
09:00 GMT UK new car sales
09:30 GMT UK composite PMI
13:15 GMT US ADP unemployment
13:30 GMT US trade balance
14:45 GMT US composite PMI
15:00 GMT US ISM services PMI
----------
It is not realistic or right for UK firms to distance themselves from China amid a need for stronger global trade, according to the head of one of Britain's most prominent business groups. Rain Newton-Smith, chief executive of the Confederation of British Industry, will say in a speech that the UK must not listen to the "siren call of protectionism" in its trade policy. It comes amid a backdrop of a looming global trade war after US President Donald Trump announced plans to impose new tariffs. Over the weekend, the Trump administration confirmed plans to introduce 25% tariffs on imports from Canada and Mexico, although the start of these has been delayed for a month. Trump imposed 10% tariffs on China, sparking instant retaliation from Beijing, which launched its own tariffs on coal, liquified natural gas and crude oil. The CBI chief will tell an audience at the University of Oxford on Wednesday that the UK "must not" fall behind one of the key trading blocs in the case of a potential trade war.
"We must project the UK as a world leader in trade, innovation and sustainable economic growth," she will say. "There may be tension between the established big blocs – the US, the EU and China. "There may be pressure to fall in behind one or more. But we must not. "Engagement is always better than protectionism, or sticking our heads in the sand. "When it comes to China, we must be practical.
----------
UK Foreign Secretary David Lammy has announced a GBP55 million package of support aimed at bolstering Ukraine's resilience, during a visit to Kyiv amid uncertainty about the future of the war. The UK will commit GBP17 million to support sustainable energy projects within the country, as part of efforts to help it recover from the damage wrought by Russia's attacks on its key infrastructure. A further GBP3 million is being provided for deliveries of Ukrainian grain and other food produce to Syria, as it grapples with the upheaval following the collapse of the Assad regime. It comes after the UK and Ukraine last month signed a new 100-year partnership deal setting out co-operation between the countries in an agreement that will stretch into the next century. Speaking during his second visit to the country since becoming foreign secretary, Lammy said the government believes in "building for the future" between Britain and Ukraine as well as helping Kyiv in the present.
----------
BROKER RATING CHANGES
----------
HSBC cuts Spirax to 'hold' - price target 8,200 pence
----------
Jefferies cuts Raspberry Pi to 'hold' (buy) - price target 770 (448) pence
----------
COMPANIES - FTSE 100
----------
GSK reported growth in annual revenue, but a decline in profit, with its bottom line hurt by a Zantac litigation settlement charge. The pharmaceutical firm upped its dividend and announced a GBP2 billion share buyback programme to be implemented over the next 18 months. GSK said pretax profit in 2024 fell 43% to GBP3.48 billion from GBP6.06 billion a year prior, though revenue increased 3.5% to GBP31.38 billion from GBP30.33 billion. GSK said its profit decline was "largely driven by" a GBP1.8 billion charge relating to the settlement of Zantac litigation. GSK also noted higher contingent consideration liabilities charges, amid "improved longer term HIV prospects" and some unfavourable foreign currency moves hurt profit. Core pretax profit rose 6% to GBP8.61 billion. It rose 13% at constant currency. "GSK delivered another year of excellent performance in 2024, with strong sales and core profit growth driven by accelerating momentum of our specialty medicines portfolio. This, together with outstanding phase III pipeline progress, means we expect another year of profitable growth in 2025," Chief Executive Officer Emma Walmsley. For 2025, GSK expects top line growth between 3% and 5% at constant currency. Revenue rose 7% at constant currency in 2024. Looking further afield, it now expects 2031 sales of over GBP40 billion, its outlook raised from over GBP38 billion. This reflects "late-stage pipeline progress". GSK maintained its final quarter dividend at 16 pence per share. Its annual dividend of 61p is up 5.2% from 58p for 2023. For this year, it expects a total payout of 65p per share. The CEO added: "In particular, we are increasing and prioritising R&D investment to promising new long-acting and specialty medicines in Respiratory, Immunology & Inflammation, Oncology and HIV. Our outperformance and stronger balance sheet support these investments and others planned in R&D, as well as the opportunity to enhance shareholder returns through our progressive dividend and the share buyback programme which we have set out today."
----------
Electricity generator SSE hailed a "good operational performance" during its third-quarter. For the full-year to March 31, it expects adjusted earnings per share expected to be between 154 and 163 pence, which ranges from a 2.8% fall to a 2.8% rise from 158.5p in financial 2024. Its third-quarter was characterised by a "good operational performance against variable weather conditions". "Generation output from SSE Renewables over the first nine months was 26% higher than the same period in prior year, reflecting the impact from capacity additions and weather conditions. January has seen the renewables fleet continue to experience periods of variable weather conditions," SSE said. "In electricity networks, the businesses have continued to deliver strong operational performance to date." SSE said its full-year outturn hinges on a "number of factors" over the remainder of the fourth quarter, including weather, market conditions, and plant performance.
----------
COMPANIES - FTSE 250
----------
Future said trading in the first four months of its financial year was as planned, but it noted the UK advertising market "continues to be challenging". The online magazine publisher, which also owns the price comparison website Go Compare, said trading in the four months to January 31 leaves it on track to achieve market expectations for the full-year. Future puts consensus at GBP217.8 million for adjusted operating profit and GBP776.9 million for revenue. "In B2C, the improvement we saw in US digital advertising and eCommerce in H2 2024 has continued, with both areas recording year-on-year growth, with broadly stable audience sessions performance. Magazines have remained more resilient, led by premium titles, whilst the UK advertising market continues to be challenging. After a standout FY 2024, performance of Go.Compare has moderated, reflecting the expected slow-down in the car insurance switching market," Future said. "We have continued the diversification into other categories such as home insurance which are delivering good growth. The market in B2B remains mixed, with enterprise technology remaining soft whilst we have seen good progress in other verticals." Future releases half-year results on May 16.
----------
OTHER COMPANIES
----------
Pressure Technologies reported a widened annual loss and weaker revenue and announced it plans a name change. The engineering firm proposed a name change to Chesterfield Special Cylinders, "reflecting the recent transformation of the group". The new name would reflect "a pre-eminent history and an exciting outlook for the business". Pressure said its pretax loss from continuing operating in the year to September 28 widened to GBP2.7 million from GBP279,000. Revenue fell 28% to GBP14.8 million from GBP20.7 million. Including discontinued operations, revenue was slightly lower at GBP31.9 million from GBP32.0 million and its pretax loss stretched to GBP2.3 million from GBP1.1 million. The firm in October sealed the sale of its Precision Machined Components arm to Raghu Vamsi Machine Tools. Pressure CEO Chris Walters said: "In a year of significant strategic progress, the sale of our PMC division was a key milestone, focusing the group on the growth and development of Chesterfield Special Cylinders, strengthening our balance sheet and removing the exposure to cyclical oil and gas markets. With today's backdrop of geopolitical tensions and increasing global defence budgets, the long-term outlook for naval newbuild and refit programmes is strong."
----------
By Eric Cunha, Alliance News news editor
Comments and questions to [email protected]
Copyright 2025 Alliance News Ltd. All Rights Reserved.