8th Apr 2025 07:48
(Alliance News) - Stocks looked set to recover somewhat from Monday's falls on Tuesday, as speculation and news around US President Donald Trump's tariffs has been fuelling market volatility.
Noting that "intraday volatility is at levels not seen since the Covid-era selloff" and "remains too high to inspire much optimism", Swissquote's Ipek Ozkardeskaya commented: "We're facing an avalanche of headlines: who's ready to negotiate, who's not, what did Trump say, what did he mean… it's nearly impossible to predict the next move...For now, Trump stands his ground, while world leaders oscillate between retaliation and negotiation.
"Meanwhile, big investors, US bank bosses, and even Elon Musk—the 'First Friend'—are voicing criticism. Maybe internal pressure in the US will eventually shift the course."
She continued: "Of course, the magnitude of this market selloff brings the Federal Reserve (Fed) into the conversation. The central bank is trapped between a rock and a hard place: above-target inflation on one side, rising recession risks on the other. The Fed is being asked to choose - fight inflation or stabilise markets.
"I believe that if the selloff worsens, the Fed will be forced to prioritise the latter. Market consensus is quietly shifting toward the possibility of four rate cuts this year - double the number expected before 'Liberation Day'."
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 194.2 points, 2.5% at 7,896.28
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Hang Seng: down 0.2% at 19,801.81
Nikkei 225: up 5.6% at 32,876.15
S&P/ASX 200: closed up 1.9% at 7,485.90
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DJIA: closed down 349.26 points, 0.9%, at 37,965.60
S&P 500: closed down 0.2% at 5,062.25
Nasdaq Composite: closed up 0.1% at 15,603.26
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EUR: lower at USD1.0972 (USD1.0994)
GBP: lower at USD1.2789 (USD1.2931)
USD: higher at JPY147.54 (JPY145.80)
GOLD: lower at USD3,005.25 per ounce (USD3,025.91)
OIL (Brent): lower at USD64.76 a barrel (USD65.38)
(changes since previous London equities close)
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ECONOMICS
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Tuesday's key economic events still to come:
11:00 BST Ireland industrial production
17:00 BST UK Bank of England Deputy Governor Clare Lombardelli speaks
13:55 BST US Redbook index
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Tesla Inc chief executive officer and US government adviser Elon Musk tried to persuade Trump to reconsider sweeping import tariffs over the weekend, but ultimately failed to change his mind, according to the Washington Post. Citing two people familiar with the matter, the US newspaper said Musk made personal appeals to the president to reverse the policy, which has rattled markets and drawn criticism from business leaders. Trump, however, doubled down on his plans and threatened to impose an additional 50% tariff on imports from China, on top of the 34% ones he announced last week. The Post quoted White House spokeswoman Karoline Leavitt as saying in a statement that Trump "put together a remarkable team of highly talented and experienced individuals who bring different ideas to the table, knowing that President Trump is the ultimate decision maker." While Musk also criticized Trump's economic advisor Peter Navarro on X and reposted a video of late conservative economist Milton Friedman praising free trade, his brother Kimbal slammed the tariffs on X, calling them a "permanent tax" on US consumers. Though Tesla is less exposed to global supply chains than traditional automakers, analysts note that weakened consumer spending triggered by tariffs could still impact demand for its vehicles.
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Keir Starmer will be questioned by senior MPs on Tuesday amid turmoil in global markets caused by US tariffs, which Donald Trump has insisted he will not pause. The UK prime minister is expected to hold a Cabinet meeting of his most senior ministers in Downing Street on Tuesday morning, before he heads to Parliament, where he will appear before the Liaison Committee of senior parliamentarians on the last day the Commons sits before it heads into the Easter recess. The global impact of Trump's tariffs is likely to be on the agenda for the committee, where Starmer may also be questioned about the war in Ukraine, conflict in the Middle East, and the US president's announcement that America will hold direct talks with Iran about its nuclear programme. The UK is among the nations arguing its case for a carve out from the trade tax on goods going into the US. The president has imposed a 10% tariff on US imports of British goods, along with the 25% tariff on cars and separate import taxes for steel and aluminium.
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Energy firms and tech giants will meet UK government ministers on Tuesday for the first round of talks on how to power the UK's plans to expand its AI infrastructure. In January, the prime minister laid out plans to make the UK a "global superpower" in AI by expanding on the data centres and compute needed to power the technology, as part of the government's AI Opportunities Action Plan. The plan included the creation of an AI Energy Council, which will meet for the first time on Tuesday and, chaired by the technology and energy secretaries, will also discuss plans to boost the UK's clean energy production. The Whitehall gathering will have representatives from the energy sector, including EDF, Scottish Power, Ofgem and the National Grid. They will be joined by tech firms such as Microsoft, Amazon Web Services, AWS, Google and British semiconductor firm Arm. The first meeting is said to be about members agreeing on the council's objectives, specifically around improving clean power generation and improving AI and compute infrastructure.
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The US Supreme Court has allowed the Trump administration to use an 18th-century wartime law to deport Venezuelans, but said they must receive a court hearing before they are taken from the US. In a bitterly divided decision, the court said Venezuelans the administration claims are gang members must be given "reasonable time" to go to court. But the conservative majority said the legal challenges must take place in Texas, instead of a Washington courtroom. The court's action appears to bar the administration from immediately resuming the flights which last month carried hundreds of people to a notorious prison in El Salvador. The flights came soon after President Donald Trump invoked the Alien Enemies Act for the first time since the Second World War to justify the deportations under a presidential proclamation calling the Tren de Aragua gang an invading force. The majority said nothing about those flights, which took off without providing the hearing the justices say is necessary. In dissent, the three liberal justices said the administration has sought to avoid judicial review in this case and the court "now rewards the government for its behaviour". Justice Amy Coney Barrett joined portions of the dissent.
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President Donald Trump said the US was starting direct, high-level talks with Iran over its nuclear program on Saturday, in a shock announcement during a White House meeting with Israeli Prime Minister Benjamin Netanyahu. Speaking Monday in the Oval Office, Trump said he was hopeful of reaching a deal with Tehran, but warned that the Islamic republic would be in "great danger" if the talks failed. Tehran confirmed discussions were set for Saturday in Oman, but stressed they were "indirect" talks. According to Iranian news agency Tasnim, Foreign Minister Abbas Araghchi will attend the talks, as will the top US envoy to the Middle East, Steve Witkoff. "It is as much an opportunity as it is a test," Araghchi wrote on X. "The ball is in America's court." Netanyahu meanwhile said the US and Israel were working on another deal to free hostages from war-torn Gaza, where a ceasefire between Israel and Iran's ally Hamas has collapsed.
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BROKER RATING CHANGES
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HSBC cuts Haleon price target to 410 (420) pence - 'hold'
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Morgan Stanley raises Hays to 'equal-weight' - price target 66 pence
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JPMorgan cuts Bridgepoint price target to 367 (433) pence - 'overweight'
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COMPANIES - FTSE 100
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Unite Group reported that it sold 75% of beds in 2025-26 as opposed to 84% the previous year, but said this was in line with the expected later leasing cycle for the current year. The student accommodation provider said it was on track to deliver 4-5% rental growth and 97-98% occupancy for 2025/26, and that it is in the advanced stages of agreeing a new university joint venture with Manchester Metropolitan University. Unite expects student numbers to increase again this year and said it continues to see strong demand from students and universities.
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COMPANIES - FTSE 250
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JTC reported a pretax loss of GBP7.4 million for 2024, against the prior year's GBP24.3 million profit. Loss per share was 4.44 pence per share, against EPS of 14.20p. Revenue however increased 19% to GBP305.4 million from GBP257.4 million. The Jersey-based professional services company's total dividend for the year was 12.54p, up 12% from 11.17p. Earnings before interest, tax, depreciation and amortisation fell 37% to GBP49.1 million from GBP77.8 million. "2024 was the first year of our Cosmos era business plan and we have made a fast start towards our goal of doubling the size of the Group for the third time since IPO," commented Chief Executive Officer Nigel Le Quesne. "We delivered record new business wins, organic growth above our upgraded guidance and a strong margin, even as we continue to invest in growth." JTC reported a "good start to the new year, with strong organic growth trends set to continue" and maintained its medium-term guidance.
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OTHER COMPANIES
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Science Group announced that it has increased its strategic investment in Ricardo to 12.5 million shares, equivalent to approximately 20.08% of the voting rights. "The 20% threshold is a key strategic investment milestone, achieved in just 7 weeks, at an average cost (including fees) of 236 pence per share," Science Group said. It added: "The Science Group shareholding was acquired at levels last seen in 2010 following disappointing Ricardo operating performance and investor loss of confidence. However, since the Ricardo Board was evidently unable to manage the company through the 'market headwinds' of 2024, there remains little confidence in the ability to navigate the global storms developing in 2025." The Cambridge, England-based science, engineering and technology investor concluded that "the need to effect change at Ricardo is even more pressing". Since it took an initial 8.5% stake in Ricardo in February, Science Group has criticised Ricardo's governance and performance and hinted at requisitioning a shareholder meeting to force changes.
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Staffline said its 2024 performance exceeded market expectations, with revenue rising 14% to GBP992.9 million from GBP871.3 million "due to market share gains and the increase in the National Living Wage". The employment agency company also swung to pretax profit of GBP5.0 million against a loss of GBP2.1 million, while underlying operating profit jumped 40% to GBP10.1 million from GBP7.2 million. The firm said it "delivered an excellent trading and cashflow performance across FY 2024 against a challenging macroeconomic backdrop". However, Staffline said it was "cautious about prospects for the year" due to "headwinds caused by the proposed increases in employers national insurance rates [which] have reduced business confidence". Still, it "expects trading to remain in line with current management expectations for FY 2025".
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By Emma Curzon, Alliance News reporter
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Related Shares:
UniteJtc PlcScience GroupRicardoStafflineHaleonHaysBridgepoint