25th Apr 2025 07:54
(Alliance News) - London is set to open higher on Friday, as UK Chancellor Rachel Reeves is set to enter talks in Washington for a possible US-UK trade deal, and a data reading shows a slowdown in March retail sales that exceeded expectations.
Investors also continue to weigh uncertainty in the US-China trade war as tensions escalate, and the UK looks close to reaching a defence and security deal with the EU.
In early corporate news, WPP reports a decline in first-quarter revenue and Mobico announces its disposal of its North America School Bus business.
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 0.2% at 8,421.04
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Hang Seng: up 0.5% at 22,027.06
Nikkei 225: closed up 1.7% at 35,648.34
S&P/ASX 200: closed for Anzac Day
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DJIA: closed up 486.83 points, or 1.2%, at 40,093.40
S&P 500: closed up 108.91 points, or 2.0%, at 5,484.77
Nasdaq Composite: closed up 457.99 points, or 2.7%, at 17,166.04
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EUR: down at USD1.1347 (USD1.1351)
GBP: up at USD1.3299 (USD1.3292)
USD: up at JPY143.51 (JPY142.72)
Gold: down at USD3,303.16 per ounce (USD3,324.20)
(Brent): down at USD65.92 a barrel (USD66.10)
(changes since previous London equities close)
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ECONOMICS
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Friday's key economic events still to come:
09:30 BST UK trade data
15:00 BST US Michigan consumer sentiment index
20:15 BST UK Bank of England MPC member Megan Greene speaks
US IMF Spring meeting
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Rachel Reeves will meet her US counterpart on Friday as she attempts to make progress on a trade deal during her visit to Washington. The UK chancellor is expected to discuss a potential UK-US trade deal when she sits down with Treasury secretary Scott Bessent after a series of talks with other finance ministers at the International Monetary Fund's spring meetings earlier this week. The government hopes that a deal with the US will mitigate the impact of the tariffs imposed by President Donald Trump at the start of April that rocked financial markets and sparked fears of a global downturn. Trump's announcement saw Britain hit with 10% tariffs on all exports to the US, as well as a 25% levy on cars, steel and aluminium. Reeves has said there is "a deal to be done" with Washington, despite suggestions from senior US officials that Trump regards the 10% tariff as a "baseline" he is unlikely to go below. But she has also ruled out several concessions the US is thought to be looking for as the price of a deal. These include reductions in food standards rules that limit imports of American agricultural goods and changes to online safety legislation that some US politicians believe limit freedom of speech.
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UK retail sales slowed in March but exceeded consensus as good weather drove footfall, a report from the Office for National Statistics showed on Friday. UK retail sales volumes rose by 0.4% in March, against a 0.7% growth in February. This outperformed an FXStreet-cited consensus for a 0.4% decline in sales. Sales by clothing and outdoor retailers were boosted by good weather, said the ONS, though gains were partly offset by falls in supermarket sales. "Non-food stores sales volumes - the total of department, clothing, household and other non-food stores - rose by 1.7% over the month. This put monthly sales volumes at their highest level since March 2022," the ONS added. "Within non-food stores, clothing stores were the subsector with the strongest growth with retailers mentioning good weather boosting sales. Other non-food stores also rose in March 2025, which was strongest within second-hand goods stores (includes antiques and auction houses) and stores selling garden supplies. Retailer comments pointed to the good weather." Sales volumes rose by 2.6% over the year to March, far exceeding a 1.8% FXStreet-cited consensus and accelerated from a 2.2% rise in the year to February. In the first quarter of 2025 that ended in March, retail sales volumes in March rose by 1.6% against the fourth quarter of 2024, and delivered growth of 1.7% when compared to the first quarter of 2024.
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UK car and commercial vehicle manufacturing production declined in the first quarter, ahead of new US tariff announcements, data published by the Society of Motor Manufacturers & Traders showed Friday. Vehicle production was down 6.3% on-year in the first quarter, despite a 17% jump in March, which was due to March 2024 production being "weak" due to an early Easter that year, the SMMT said. Total vehicle manufacturing in the UK stood at 239,213 in the first quarter of 2025, compared to 255,283 a year ago. SMMT Chief Executive Mike Hawes said: "A March uplift to manufacturing is overdue good news, although the performance was boosted by a comparatively weaker month last year, when holiday timings and product changeovers combined to reduce output. With the last quarter showing demand for British-built cars rising overseas, navigating the new era of trade uncertainty is now the major challenge. Government has rightly recognised automotive manufacturing's critical role in Britain's export economy and must now show urgency and creativity to deliver a deal that supports our competitiveness, spurs domestic demand for the latest cleanest vehicles, and helps factory lines flourish."
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Talks with British Prime Minister Keir Starmer could "pave the way" for a defence and security pact, EU chief Ursula von der Leyen said as the pair met in London. With a landmark post-Brexit EU-UK due summit next month, both sides are seeking to improve ties amid the global turmoil ushered in by US President Donald Trump. However Starmer faces a tricky balancing act, as he is also looking to reach out to the Trump administration and secure a favourable trade deal with the US. UK and EU officials have been hoping a defence and security pact will be the highlight of the May 19 meeting, as Trump's return to the White House casts doubt on the US' commitment to NATO and European security. European Commission President von der Leyen said Thursday's talks could lead to the UK joining a European defence programme. "We will discuss work on a strategic security and defence partnership agreement, which might pave the way then to a joint procurement and UK participation in our SAFE programme," she said, referring to a EUR150 billion joint EU fund allowing countries to buy missiles, artillery, drones, ammunition and other equipment.
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The head of Alphabet Inc's Google's UK and European operations has issued a "call to arms" over a worrying gap in the UK's adoption of artificial intelligence [AI] that could leave Britain at risk of missing out on a GBP200 billion boost to the economy. New research from the tech company suggests that two-thirds of workers [66%] in Britain have never used generative AI in their jobs, with usage particularly low among women over 55 and those from lower socio-economic backgrounds. The firm said that while AI has the potential to add GBP400 billion to Britain's economy by the end of the decade through enhanced productivity, only half of this will be realised if the UK does not plug the adoption gap. Debbie Weinstein, president of Google in Europe, the Middle East and Africa, told the PA news agency the group's report was a "call to arms… to make sure we're providing the tools that workers need for the UK". She said: "Addressing this adoption gap is essential to realising the economic benefits and the benefits in terms of time savings." "More needs to be done," she cautioned.
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US President Donald Trump has ordered the Justice Department to investigate the Democratic Party's top fundraising platform. Trump, in an executive order signed on Thursday, directed Attorney General Pam Bondi to investigate allegations made by Republicans that ActBlue allows illegal campaign donations. Democrats, who had anticipated they would be targeted, condemned the move on Thursday. ActBlue called it an "oppressive use of power" by the White House. "The Trump Administration's and GOP's targeting of ActBlue is part of their brazen attack on democracy in America. Today's escalation by the White House is blatantly unlawful and needs to be seen for what it is: Donald Trump's latest front in his campaign to stamp out all political, electoral and ideological opposition," ActBlue said in a statement. ActBlue said it would pursue "all legal avenues to protect and defend itself". "ActBlue will continue its mission and work undeterred and uninterrupted, providing a safe, secure fundraising platform for the millions of grassroots donors who rely on us." Trump's order directs Bondi, in consultation with the Treasury Department, to investigate allegations that online fundraising platforms, and specifically ActBlue, have been used by some to "make 'straw' or 'dummy' contributions or foreign contributions to political candidates and committees". The findings of the investigation will be reported back within 180 days, according to the order.
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US President Donald Trump has defied international norms on the nascent field of deep-sea mining, signing an executive order Thursday expanding the practice for rare earth minerals in domestic and international waters. White House aides say the initiative could see US operations scoop up more than a billion metric tons of mineral-rich deep-sea nodules, and pump hundreds of billions of dollars into the American economy. But the move to disrupt ocean floor ecosystems to extract cobalt and other minerals flies in the face of environmental group concerns and the controls set by global regulators at the International Seabed Authority. Since the 1990s, the group has sought to set ground rules for the burgeoning industry's extraction efforts in international waters. But the US never ratified the agreements that empowered the ISA's jurisdiction and is not a member of the UN-affiliated body. Instead, the Trump administration is "relying on an obscure 1980 law that empowers the federal government to issue seabed mining permits in international waters," the New York Times reported.
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US President Donald Trump insisted on Thursday that trade negotiations with China were ongoing, despite statements from Beijing that his comments on talks were "fake news." Responding to questions about negotiations with China during a White House meeting with Norwegian Prime Minister Jonas Gahr Store, Trump said: "Well, they had a meeting this morning, and we met with China." The latest comments came after a spokesman for the Chinese Foreign Ministry on Thursday rejected Trump's assertion that talks with China were occurring "every day." "As far as I know, there have been no consultations or negotiations between China and the US on the tariff issue - let alone an agreement," the spokesman said. He added that reports to the contrary were "fake news." US Treasury Secretary Scott Bessent also told the media that both sides were waiting to talk to each other. He said he did not believe either country sees the current tariff level as sustainable in the long term.
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A US judge on Thursday partially blocked an executive order by President Donald Trump aimed at sweeping election reforms, the latest legal setback in enacting his agenda. Judge Colleen Kollar-Kotelly specifically prevented the Trump administration from requiring voters to provide proof of US citizenship when registering to vote at the state level. The executive order, signed at the end of March, set its sights on restricting mail-in voting, which Trump has criticized for years. The order faced legal challenges as soon as it was signed, with the Democratic Party itself launching court proceedings against it. Kollar-Kotelly justified enacting a preliminary injunction against Trump's order by arguing that on further review of "the merits, the plaintiffs are substantially likely to prevail." "Our Constitution entrusts Congress and the States – not the President -- with the authority to regulate federal elections," she wrote in her 120-page decision. Kollar-Kotelly declined to block another significant part of the executive order, which required states to impose a deadline for mail-in ballots coinciding with the close of polls on Election Day.
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The EU and US are far from reaching a deal on tariffs, France's economy minister said, as the bloc seeks a way out from trade tensions with Washington. US President Donald Trump has slapped new 10% tariffs on most trading partners since returning to the White House in January, and imposed sharp levies on imports of steel, aluminum and autos. The EU has not been spared, and a 90-day pause on even higher rates for goods from the bloc is due to expire in early July. "We're not going to hide the fact that we're still a long way from an agreement," said French economy minister Eric Lombard in an interview with journalists on the sidelines of the International Monetary Fund and World Bank's spring meetings in Washington. But he maintained that talks with US officials were warm. He said he met this week with director of the White House National Economic Council Kevin Hassett, US Commerce Secretary Howard Lutnick and Treasury Secretary Scott Bessent. Lombard noted a desire from his counterparts to "move forward as quickly as possible," adding that Europeans have been described as friends and allies in the context of these talks. But Lombard expects "ups and downs" in negotiations between both sides.
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BROKER RATING CHANGES
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HSBC cuts Smith & Nephew to 'hold' - price target 1,070 pence
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Goldman Sachs cuts Asos price target to 305 (345) pence - 'sell'
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Berenberg raises Babcock International price target to 910 (885) pence - 'buy'
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COMPANIES - FTSE 100
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WPP reports revenue of GBP3.24 billion for the first quarter of 2025 that ended March 31, down 5.0% from GBP3.41 billion the year before. Excluding pass-through costs, revenue declined 7.8% to GBP2.48 billion from GBP2.69 billion a year prior. "Our financial performance in [the first quarter] was in line with our expectations, reflecting macroeconomic challenges and the timing of new business, and we expect these factors to continue in [the second quarter] with performance anticipated to improve in the second half." says Chief Executive Officer Mark Read. "While WPP is not itself directly affected by tariffs, they will impact a number of our clients as well as the broader economy. At this point we have not seen any significant change in client spending and we reiterate our full-year guidance which already reflected a challenging environment." WPP expects like-for-like revenue excluding pass-through costs to be flat or to decline around 2% during 2025, and guides for a broadly flat headline operating profit margin, excluding the impact of foreign exchange. WPP expects performance to improve during the second half of the year.
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COMPANIES - FTSE 250
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Mobico Group intends to sell its North America School Bus business to infrastructure investment manager I Squared Capital for up to USD608 million. The value of the deal includes an earn-out of up to USD70 million, which is dependent on future performance conditions. Mobico expects the disposal to complete in the third quarter of 2025. "This agreement is a significant milestone for Mobico. It is a first step in strengthening the group's balance sheet and will allow us to reallocate resources away from a capital-intensive business as we focus on continued deleveraging alongside funding our pipeline of growth opportunities, especially in ALSA," says Chief Executive Officer Ignacio Garat. Looking ahead, Mobico expects to deliver 2024 adjusted operating profit at the lower end of guidance, with School Bus expected to contribute around GBP9 million to profit. The firm also expects to post a "significant" loss for the year, driven by goodwill write-offs, derecognition of deferred tax assets and onerous contract provisions in relation to its German business. Mobico will release its full-year results on April 29.
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OTHER COMPANIES
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SigmaRoc announces it has partnered with Adaptavate to scale low-carbon technology within the global construction industry. The deal is part of Adaptavate's GBP2.7 million pre-Series A funding round, which included participation from SigmaRoc's Skreenhouse Ventures. "We are proud to support Adaptavate in its mission to transform the built environment through circular, low-carbon construction solutions. Together, we are driving the next wave of sustainable construction," said Fons Vermorken, group executive committee member at Innovate, SigmaRoc. "By leveraging SigmaRoc's position as a leading limestone player in Europe, we bring industrial strength, infrastructure, and market reach to help scale Adaptavate's innovations globally."
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Evoke reports revenue of GBP437.2 million for the first quarter of 2025 that ended March 31, up 1.4% from GBP431.2 million the year before. Adjusted earnings before interest, tax, depreciation and amortisation was also "significantly" higher, at more than GBP330 million over the last twelve months. "This reflects the group's significantly more efficient operating model and our clear focus on creating value through sustainable, profitable growth," says Chief Executive Officer Per Widerstrom. "We are building momentum in the right areas of the business with particularly strong growth across our International Core Markets. Whilst the [UK & Ireland] Online and Retail performance was behind where we wanted to be in Q1, we have moved swiftly to improve some of the underlying drivers of the performance and have been seeing stronger trends in April." Full-year revenue growth is expected to be consistent with the firm's mid-term target of 5% to 9% annual growth. As of Tuesday, year-to-date revenue growth is around 4%.
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By Emily Parsons, Alliance News reporter
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