3rd Apr 2025 07:58
(Alliance News) - London stocks are called down on Thursday, following US President Donald Trump's announcement of sweeping and severe reciprocal tariffs in his pledge to "make America wealthy again."
Asian markets were firmly in the red on Thursday, as China, Taiwan, Japan and Thailand have all threatened to hit back at US tariffs.
European blue chips also closed lower. The EU is finalising its first package of countermeasures, with Commission President Ursula von der Leyen warning Europe is prepared for further retaliation if necessary.
The UK trade secretary is due to speak to MPs on Thursday morning. No immediate retaliatory measures are expected from Westminster, as officials continue to focus on securing an economic deal with their counterparts in Washington.
Meanwhile, the price of gold hit a new record Wednesday shortly after President Trump's latest tariff announcement.
Gold crossed the previous record at around 2300 GMT and then continued to climb above USD3,150 an ounce, as traders piled into the safe haven asset amid a steep decline in stock market futures. Gold hit a high of USD3,167.69 on Wednesday.
In early UK corporate news, Primary Health Properties makes another takeover bid for London peer Assura, while BP reports first production at its Cypre offshore gas project.
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 1.6% at 8,468.88
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Hang Seng: down 1.7% at 22,810.90
Nikkei 225: closed down 3.3% at 34,537.60
S&P/ASX 200: closed down 0.9% at 7,859.70
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DJIA: closed up 235.36 points, or 0.6%, at 42,225.32
S&P 500: closed up 37.90 points, or 0.7%, at 5,670.97
Nasdaq Composite: closed up 151.16 points, or 0.9%, at 17,601.05
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EUR: up at USD1.0972 (USD1.0855)
GBP: up at USD1.3110 (USD1.2967)
USD: down at JPY147.06 (JPY150.00)
Gold: down at USD3,125.31 per ounce (USD3,126.39)
(Brent): down at USD72.92 a barrel (USD74.66)
(changes since previous London equities close)
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ECONOMICS
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Thursday's key economic events still to come:
08:20 BST eurozone European Central Bank vice-president Luis de Guindos speaks
08:55 BST Germany composite PMI
09:00 BST eurozone composite PMI
09:30 BST UK composite PMI
10:00 BST eurozone PPI
10:00 BST eurozone European Central Bank executive board member Isabel Schnabel speaks
13:30 BST US trade balance
13:30 BST US initial jobless claims
14:45 BST US composite PMI
15:00 BST US ISM services PMI
15:30 BST US EIA natural gas stocks
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US President Trump announced sweeping and severe reciprocal tariffs as he pledged to "make America wealthy again." Trump said the US will calculate the combined rate of all other countries tariffs and "charge them roughly half of what they are charging us." Brandishing a chart at the White House, Trump said the UK will face a 10% tariff, which will be the baseline, the EU 20% and China 34%. Other tariffs imposed include Vietnam at 46%, Cambodia 49%, Taiwan 32%, Japan 24%, South Africa 30%, India 26%, South Korea 25%, Thailand 36%, Switzerland 31% and Indonesia 32%. Trump repeated that at midnight, the US will impose a 25% tariff on all foreign-made automobiles. Trump said "April 2, 2025, will forever be remembered as the day American industry was reborn, the day America's destiny was reclaimed and the day that we began to make America wealthy again." He said for decades the US "has been looted pillaged, raped and plundered by nations near and far, both friend and foe alike." Trump said tariffs will bring back a "golden age" for the US, and said jobs and factories "will come roaring back into our country."
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The UK prime minister is set to speak to business leaders while the Trade secretary will look to calm markets on Thursday after Donald Trump slapped a 10% tariff on US imports of UK goods. Jonathan Reynolds is due to address MPs on Thursday morning after Trump confirmed sweeping import levies on countries across the world, hailing America's "declaration of economic independence". He said on Wednesday evening that the UK is still seeking to do a deal with the US that "we hope will mitigate the impact" of the tariffs, but that "nothing is off the table" when it comes to a response. Meanwhile, Downing Street suggested they had been vindicated in their approach to negotiating with the US in the hope of securing an exemption. The 10% tax facing UK goods is half that facing the EU. The EU is ready to respond to new US tariffs, the bloc's chief Ursula von der Leyen warned Thursday, but urged President Trump to address his concerns through dialogue. "We are now preparing for further countermeasures to protect our interests and our businesses if negotiations fail," von der Leyen said.
Meanwhile, Germany said it backed the EU in its efforts to seek a "negotiated solution" with Washington over new tariffs but also warned the bloc was ready to hit back. "We have always pushed for negotiations, not confrontation," said German Economy Minister & Vice Chancellor Robert Habeck, adding that the EU was ready to give "a balanced, clear and determined response" if talks fail.
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UK Foreign Secretary David Lammy is set to call on the UK's Nato allies to increase defence spending to make the alliance "stronger, fairer and more lethal". The Foreign Office said Lammy will tell allies at a meeting of Nato foreign ministers in Brussels on Thursday that boosting defence spending is the collective duty of Nato members to improve safety in the face of long-term and interconnected threats from Russia and its enablers. It comes after the UK announced the largest sustained increase to defence spending since the Cold War, hitting 2.5% from April 2027 and rising to 3% in the next parliament – an increase of GBP11.8 billion. The Foreign secretary will also discuss the practical planning undertaken by the UK, France and other allies to prepare and deploy as a coalition of the willing in the event of a peace deal in Ukraine.
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Beijing on Thursday threatened countermeasures after US President Donald Trump announced new tariffs on Chinese goods, further escalating trade tensions between the world's two largest economies. The US has already imposed 20% tariffs on Chinese imports, prompting retaliation from Beijing. The latest round, which Trump announced on Wednesday, adds a 34% tariff hike, raising total duties on many Chinese products to over 50%. China's Ministry of Commerce said the tariffs violated international trade rules and were based on subjective and unilateral assessments by the US, calling them a typical act of bullying. The ministry urged Washington to remove the measures and resolve disputes through dialogue, or it would take countermeasures to protect its rights and interests.
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Taiwan on Thursday said US President Donald Trump's tariffs were "highly unreasonable" and the government planned to start "serious negotiations" with Washington. Taiwan had sought to avoid Trump's threatened levies by pledging increased investment in the US, more purchases of US energy, and greater defence spending. But Trump's sweeping new tariffs announced overnight included a hefty 32% tax on Taiwanese imports, which Taipei described as "unfair". "The Executive Yuan found the decision highly unreasonable and deeply regretted it, and will initiate serious negotiations with the US," cabinet spokeswoman Michelle Lee said. Taiwan's trade surplus with the US is the seventh highest of any country, reaching USD73.9 billion in 2024. Around 60% of Taiwan's exports to the US are information and communications technology products, or ICT, which includes semiconductor chips. Lee said the surplus reflected soaring US demand for Taiwan's semiconductors and other tech products that was further driven by the tariffs and export controls targeting China that Trump imposed during his first term. "The proposed tariff does not accurately reflect the actual state of Taiwan-US trade relations and is unfair to Taiwan," Lee added.
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Japan on Thursday slammed the new US tariffs as "extremely regrettable" saying they may break World Trade Organisation rules and the two countries' trade agreement. Japanese firms are the biggest investors into the US but Tokyo has failed to secure an exemption, with Trump announcing a hefty 24% levy on Japanese imports. "I have conveyed that the unilateral tariff measures taken by the US are extremely regrettable, and I have again strongly urged [Washington] not to apply them to Japan," Yoji Muto, trade and industry minister, told reporters. He said he spoke to US Commerce Secretary Howard Lutnick before Trump's announcement of a new 10% baseline tariff and extra levies on selected countries – including close strategic ally Japan. Muto said he had explained to Lutnick "how the US tariffs would adversely affect the US economy by undermining the capacity of Japanese companies to invest"."We had a frank discussion on how to pursue cooperation in the interest of both Japan and the US that does not rely on tariffs," Muto said. Asked if Japan will impose retaliatory tariffs or is considering filing a suit to the WTO, Hayashi said: "We decline to disclose details of our considerations."
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Working age UK households are on track to be GBP400 worse off on average in the year ahead amid income squeezes and bill hikes, a think-tank predicts. As the new tax year gets underway in April, households face a "triple hit" from the impacts of tax, utility bill increases, and benefits that are not keeping pace with the cost of living, the Resolution Foundation said.
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BROKER RATING CHANGES
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Barclays cuts Intercontinental Hotels target to 9,600 (11,300) pence - 'overweight'
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Berenberg raises Wheaton Precious Metals target to 6,900 (5,900) pence - 'buy'
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UBS cuts Travis Perkins price target to 530 (750) pence - 'neutral'
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COMPANIES - FTSE 100
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BP confirmed the delivery of first gas at the Cypre development project, under its Trinidad & Tobago arm, bpTT. The oil major expects production at Cypre to make a "significant contribution" towards the 250,000 barrels of oil equivalent per day combined peak net production expected from the 10 "major" projects BP anticipates to start up between 2025 and 2027. Cypre is bpTT's third subsea development, and is projected to deliver around 45,000 boed. Its first development phase completed at the end of 2024, with the second phase due to begin in the second half of 2025.
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COMPANIES - FTSE 250
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Primary Health Properties made a new takeover bid for care property investor and developer Assura, with an offer for 9.08 pence in cash plus a 0.3848 new PHP share for each Assura share. The bid values Assura at 46.2p per share, a total of GBP1.5 billion, and includes the 0.84p interim Assura dividend due to be paid on April 9. Under the offer terms, Assura shareholders would have an around 48% holding in the combined group. Assura in mid-March said it would be "minded to accept" another cash bid from a US private equity consortium, should a firm offer be made. The bid from Kohlberg Kravis Roberts & Co Partners and Stonepeak Partners UK was valued at GBP1.61 billion, or 49.4p per share. This followed Assura's rejection of PHP's prior approach at 43p per share, as it noted the private equity cash bid proposal was more attractive and with "materially less risk". PHP has until Monday to make a firm offer for Assura, with rival KKR's deadline shortly afterwards on April 11.
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Moonpig announced its intention to launch a new share buyback for up to GBP60 million, to begin in financial 2026 following the completion of its ongoing programme for up to GBP25 million by the financial year-end. The gift cards firm expects revenue for the financial year due to end April 30 between GBP350 million and GBP353 million, against GBP341.1 million in financial 2024, and guides for a "stronger than expected" adjusted earnings before interest, tax, depreciation and amortisation margin at the top end of its 25% to 27% forecast, against 28% the year before. Moonpig anticipates double-digit percentage growth in adjusted earnings per share. "Gift attachment rates at Moonpig and Greetz have seen strong growth in the second half, supported by enhanced recommendation algorithms and the introduction of trusted third-party brands to our curated gifting range. Membership of our Plus subscription scheme continues to grow, and our tracked Moonpig Guaranteed Delivery service is now chosen for one in five card-only orders in the UK. Gross margin rate performance has remained strong, consistent with the first half of the year," Moonpig says. Looking ahead, the firm believes itself "well-positioned to benefit from the long-term structural shift to online".
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OTHER COMPANIES
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IT managed services provider Redcentric announced its chief executive officer designate Brian Woodford has stepped down from the role with immediate effect "for personal reasons". The group's current CEO Peter Brotherton agrees to continue in the role until further notice. "During my time with the company, I've enjoyed working with varied clients and dedicated colleagues and wish the entire team continued success," says Woodford. Woodford was named CEO designate in January this year, and had been due to step into the CEO role following a two-month transition period.
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By Emily Parsons, Alliance News reporter
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