31st Jan 2025 07:47
(Alliance News) - London's FTSE 100 is called to open higher on Friday, on what could be the eve of US President Donald Trump's tariff D-Day.
President Donald Trump said his 25% tariffs on Canada and Mexico are coming on Saturday, but he is still considering whether to include oil from those countries as part of his import taxes.
"We may or may not," Trump told reporters on Thursday in the Oval Office about tariff plans for oil from Canada and Mexico.
"We're going to make that determination probably tonight."
SPI Asset Management analyst Stephen Innes commented: "Trump's tough talk continues to roil FX markets. However, he's left traders hanging by a thread with his indecision over whether to exclude oil imports from this tariff tirade, promising a resolution shortly."
Tariff uncertainty supported gold, which hit another record high, and was on the cusp of the USD2,800 an ounce mark.
In early UK corporate news, Smiths Group announced a break-up plan, with its Interconnect and Detection divisions set to be separated.
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 8,662.48
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Nikkei 225: up 0.2% at 39,572.49
S&P/ASX 200: up 0.5% at 8,532.30
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DJIA: closed up 168.61 points, 0.4%, at 44,882.13
S&P 500: closed up 0.5% at 6,071.17
Nasdaq Composite: closed up 0.3% at 19,681.75
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EUR: lower at USD1.0411 (USD1.0423)
GBP: lower at USD1.2437 (USD1.2461)
USD: higher at JPY154.60 (JPY154.37)
GOLD: higher at USD2,799.44 per ounce (USD2,793.57)
(Brent): lower at USD76.14 a barrel (USD77.18)
(changes since previous London equities close)
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ECONOMICS
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Friday's key economic events still to come:
08:55 GMT Germany unemployment
13:00 GMT Germany CPI
11:00 GMT Ireland CPI
13:30 GMT US employment cost index
13:30 GMT US personal consumption expenditures
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UK house price growth softened at the start of the year, a tracker from mortgage lender Nationwide showed. UK house prices rose 4.1% on-year this month, easing from a 4.7% climb in December, according to Nationwide. The average price edged up 0.1% in January from December, to sit at GBP268,213. In December, prices rose 0.7% on-month. Nationwide analyst Robert Gardner commented: "The housing market continues to show resilience despite ongoing affordability pressures." Gardner added: "While there has been a modest improvement over the last year, affordability remains stretched by historic standards." From the end of March, the temporary increase in the nil rate stamp duty thresholds will end. For first-time buyers of a home under GBP500,000, the nil rate band falls to GBP300,000 from GBP425,000 currently. For other home buyers, the nil rate band threshold is to decline to GBP125,000, from GBP250,000. The measures were announced by Chancellor Rachel Reeves in the October autumn budget.
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BROKER RATING CHANGES
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HSBC cuts Sainsbury's to 'hold' - price target 285 pence
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Jefferies starts Volex with 'buy' - price target 350 pence
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COMPANIES - FTSE 100
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Smiths Group said it will look to sell its electronic connectors and separate is threat detection arm as it looks to "unlock significant value and enhance returns to shareholders". The engineering firm said Smiths Interconnect is to be divested, and then Smiths Detection will be separated either by UK demerger or sale. Smiths is targeting an announcement by the end of the calendar year in regard to an Interconnect sale. "Capitalising on our strong financial and operational momentum, we will now simplify the group to focus on high performance industrial technologies for efficient flow and heat management. These technologies are delivered by our world-class John Crane and Flex-Tek businesses, which serve attractive energy and industrial end markets and are set to deliver continued growth and margin expansion," Smiths said. "Smiths Interconnect and Smiths Detection are both attractive businesses with strong market positions, leading technologies and close customer relationships. Both businesses have delivered significant recent performance improvement, with Smiths Interconnect's markets returning to growth and Smiths Detection benefiting from the continued airport investment upgrade cycle. Recognising this improvement, the board has decided that the separation of these two divisions now best serves the prospects of these businesses, the group as a whole and our shareholders." The strategy update follows the firm facing a call to break-up. US activist investor Engine Capital said Smiths should explore a split, according to a Financial Times report earlier in January. Smiths said a "large portion" of disposal proceeds will be returned to shareholders. The company also said it has upped its share buyback programme to GBP500 million from GBP150 million. "We have completed GBP85 million of the previously announced GBP150 million and will complete the remaining GBP65 million by the end of March 2025 - ahead of our original target. We expect the additional GBP350 million announced today to be completed by the end of calendar year 2025," it added. Smiths left its guidance for the current financial year unchanged, despite a recent cyber incident. Smiths reported Tuesday that a cybersecurity incident that involved unauthorised access to its systems. "As a result of the immediate, proactive measures that we took, we have been able to minimise the impact on our operations. In terms of financial impact, our guidance for the full year is unchanged noting that, given the proximity of the incident to our half year close, we anticipate a portion of the revenue from the last week of January will shift into the second half of the financial year," Smiths added. The firm's financial year ends on July 31.
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COMPANIES - FTSE 250
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Tritax Big Box REIT said it entered 2025 "with growing confidence" as the investor in logistics warehouses hailed growth in contracted rent through lettings and reviews last year. It secured GBP11.6 million of contracted rent from "active management", up from GBP4.9 million in 2023, and GBP11.1 million from lettings, a rise from GBP7.8 million on-year. It meant Tritax Big Box REIT secured GBP22.7 million of contracted rent from "active management and development lettings". Its portfolio value at the end of last year stood at GBP6.5 billion, a rise from GBP5.0 billion a year prior. "We are delivering and enhancing performance across all aspects of our business as we make excellent progress implementing our strategy. In line with guidance, we saw an uptick in activity in H2 2024, most notably securing one of the UK's largest pre-lets of the year of nearly 1 million sq ft to a global leader in ecommerce," Chief Executive Officer Colin Godfrey said. "We enter 2025 with growing confidence, driven by improving occupational market conditions, our expanded range of growth drivers - which now include highly accretive data centre developments - and enabled by ongoing investment in our high-calibre team, dedicated to achieving continued success for Tritax Big Box." Tritax Big Box REIT in May sealed a tie-up with UK Commerical Property REIT. Tritax Big Box added Friday: "In eight months, we have delivered the upper end of our GBP150-200 million guidance for UKCM non-strategic asset disposals and have continued our ongoing capital recycling programme."
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OTHER COMPANIES
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Ground Rents Income Fund said it has received another takeover proposal from Victoria Property, which the real estate company believes is still "unattractive". Ground Rents said the latest proposal is worth 37.5 pence per Ground Rents share, a 10% increase from the prior tilt of 34p. "The board has concluded that the latest proposal remains unattractive and materially undervalues the company and that it cannot recommend the latest proposal to GRIO shareholders. Accordingly, the board is unanimously rejecting the latest proposal," Ground Rents said. The latest proposal values Ground Rents at around GBP35.9 million.
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James Halstead expects annual profit in line with market expectations, despite tricky trade in the UK on budget uncertainty. The flooring manufacturer said sales in the half-year to December 31 are "slightly below" the prior, but pretax profit "comparable" to a year earlier. "In the UK, the core home market, the company has experienced more caution following the incoming government's first budget and the subsequent changes to living wage and national insurance. Our UK sales in the first six months are in line with the comparative but have been constrained, in part, as a result of lower confidence leading to customers revising their capital spend and deferring renewal," James Halstead said. "In overseas markets there are many positives in our broad reach of sales. Whilst Australia and New Zealand sales have declined, turnover in the Americas, the Middle East and Mediterranean is progressing." It will announce half-year results on March 31.
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By Eric Cunha, Alliance News news editor
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