15th Apr 2025 07:42
(Alliance News) - The FTSE 100 was called to open higher on Tuesday, while the UK unemployment was reported to have held steady.
Meanwhile in the US, Trump has suggested that he might temporarily exempt the motor industry from tariffs on the sector, to give carmakers time to adjust their supply chains. US stocks closed higher on Monday.
"I don't wish to tempt fate whatsoever here, as I think most participants – myself included! – will be incredibly glad of the somewhat calmer conditions that seem to be prevailing," Pepperstone's Michael Brown commented. "I think most, particularly given recent events, will also not be expecting these conditions to last especially long."
He continued: "I remain a rally seller in the equity space, though, especially as we've now locked in 90 days of tariff-related uncertainty at the very least, amid the pause in 'reciprocal' tariff measures. One would expect vol to remain higher for the foreseeable future as a result. In any case, participants are likely to grow increasingly jittery, the longer time goes on without trade deals being agreed, and tariff off ramps being used.
"This is particularly true if incoming data begins to soften in the meantime, making Wednesday's US retail sales data pivotal, particularly given the collapse in consumer sentiment of late."
In corporate news, accountancy services firm MHA PLC marked its first day of trading on AIM.
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 20.2 points, 0.3%, at 8,154.54
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Hang Seng: down 0.1% at 21,392.49
Nikkei 225: up 1.0% at 34,323.52
S&P/ASX 200: up 0.2% at 7,764.70
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DJIA: closed up 312.08 points, 0.8%, at 40,524.79
S&P 500: closed up 0.8% at 5,405.97
Nasdaq Composite: closed up 0.6% at 16,831.48
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EUR: lower at USD1.1357 (USD1.1375)
GBP: higher at USD1.3209 (USD1.3183)
USD: lower at JPY142.92 (JPY143.21)
GOLD: higher at USD3,226.59 per ounce (USD3,207.11)
OIL (Brent): higher at USD65.02 a barrel (USD64.83)
(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 CEST eurozone industrial production
11:00 CEST eurozone ZEW economic sentiment survey
08:00 CEST Germany wholesale prices
11:00 CEST Germany ZEW economic sentiment survey
11:00 BST Ireland trade balance
08:30 EDT US export and import prices
08:30 EDT US New York empire state manufacturing index
08:55 EDT US Redbook index
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The UK unemployment rate held steady in the three months to February, while pay growth remained robust, numbers on Tuesday showed. The Office for National Statistics said the UK jobless rate was 4.4% in the three months to February 2025, unchanged from the previous three-month period. The rate comes in line with the FXStreet-cited market consensus and above the 4.2% unemployment rate recorded a year earlier. Vacancies fell by 26,000 in the quarter to 781,000 in the three months to March. The number of payrolled employees fell by 8,000 between January and February but rose by 35,000 year-on-year. However, a provisional estimate for March showed a sharp monthly drop of 78,000, bringing the total to 30.3 million. Annual growth in regular pay, which excludes bonuses, was 5.9% in the three months to February, unchanged from the prior period. Total pay, including bonuses, grew 5.6%, slightly down from 5.8% in the previous quarter.
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The US central bank may need to lower interest rates sharply to support the US economy if President Trump follows through on his threat to resume big "reciprocal" tariffs, a top official at the Federal Reserve on Monday warned. Christopher Waller, a Federal Reserve governor, said that if the US president reimposes the levies unveiled on April 2, economic growth is likely to slow to a crawl, unemployment will rise and inflation soar. The Federal Reserve would then be forced to quickly make a series of "bad news" rate cuts, he said. Waller predicted unemployment could approach 5%, as could inflation. "If the [economic] slowdown is significant and even threatens a recession, then I would expect to favour cutting the FOMC's policy rate sooner, and to a greater extent than I had previously thought." In a scenario where tariffs are lower, Waller expects the effect on inflation would be significantly smaller than if larger tariffs remained. This would require "a limited monetary policy response," he added.
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Trump has suggested that he might temporarily exempt the motor industry from tariffs he previously imposed on the sector, to give car makers time to adjust their supply chains. "I'm looking at something to help some of the car companies with it," the US president told reporters in the Oval Office. He said carmakers need time to relocate production from Canada, Mexico and other places, "and they need a little bit of time because they're going to make them here, but they need a little bit of time. So I'm talking about things like that". The statement hinted at yet another round of reversals on tariffs as Trump's onslaught of import taxes has panicked financial markets and raised deep concerns from Wall Street economists about a possible recession. When he announced the 25% motor tariffs on March 27, he described them as "permanent".
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The warmer weather helped drive a modest improvement in UK retail sales during March, a report showed. According to the BRC-KPMG retail sales monitor, UK total retail sales increased by 1.1% year-on-year in March, against growth of 3.5% a year ago. Last year's figure was boosted by the timing of Easter, which fell in March 2024. Linda Ellett, UK head of consumer, Retail & Leisure, KPMG, said: "Amidst downbeat consumer confidence in the UK's economic outlook, and many households facing rising costs, retail sales growth feels an achievement." Food sales increased by 1.6% year-on-year in March, against a growth of 8.3% last year, while non-food sales rose by 0.6% year-on-year in March, against a decline of 0.4% in March 2024. "Despite a challenging global geopolitical landscape, the small increase in both food and non-food sales masked signs of underlying strengthening of demand given March 2025's comparison with last year's early Easter," said British Retail Consortium Chief Executive Helen Dickinson. "The improving weather made for a particularly strong final week, with gardening and DIY equipment flying off the shelves. Jewellery and beauty products were helped by Mother's Day, though sales of bigger ticket items like furniture remained weak. Retailers are making final preparations for Easter, with food expected to be the big winner next month," she added.
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China is expected to post first-quarter growth of 5.1% on Wednesday, analysts say. Official data on Wednesday will offer a first glimpse into how trade war fears are affecting the fragile economic recovery of the world's number two economy, which was already feeling the pressure of persistently low consumption and a property market debt crisis. Analysts polled by AFP forecast China's economy to have grown 5.1% from January to March – down from 5.4% the previous quarter.
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UK business confidence slumped over the first three months of the year as bosses entered "a state of despondency" over rising taxes combined with the threat of US trade tariffs. A poll by the Institute of Chartered Accountants in England and Wales indicated that confidence is at its lowest point since late 2022, when inflation was surging amid the energy crisis and former prime minister Liz Truss's mini-budget. The ICAEW's business confidence monitor, which produces an index score from its quarterly surveys, came in at minus 3, the weakest reading since the fourth quarter of 2022 and down from 0.2 in the previous poll. More than half of companies polled in the ICAEW's most recent survey, 56% of respondents, said taxes were a mounting challenge, an all-time high figure.
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BROKER RATING CHANGES
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Goldman Sachs raises Next to 'buy' - price target 14000 pence
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RBC raises discoverIE to 'outperform' (sector perform) - price target 600 (690) pence
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Canaccord cuts Tullow Oil to 'hold' (spec, buy) - price target 14 (22) pence
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COMPANIES - FTSE 250
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B&M European Value Retail announced a trading update for the year ended March 29. Group revenue increased 3.7% on-year to GBP5.6 billion "with revenue growth from new store performance and positive like-for-like (LFL) sales in France offsetting negative LFL performance in B&M UK and Heron Foods". The company said the gross margin for B&M UK was robust, helped by total volume growth and relatively stronger trading in general merchandise categories. Also, B&M expects group adjusted earnings before interest, tax, depreciation and amortisation to be above the midpoint of its GBP605 million to GBP625 million guidance range. "The board is making progress on CEO succession and will make an announcement in the coming weeks," it added.
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In its second-quarter trading update, investment platform operator IntegraFin reported strong net inflows of GBP1.2 billion to the Transact platform, up from GBP800 million the year before. Transact's funds under direction totalled GBP65.9 billion at March 31, up 8% from the same date in 2024. IntegraFin expects total group revenue to rise by over 9% on-year to around GBP77 million for the first half of financial 2025, from GBP70.4 million. Its full-year guidance remains unchanged. "We also reiterate our previous cost guidance that, beyond FY25, we expect total administrative costs to moderate, rising by low to mid-single digit percentages," the company added.
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OTHER COMPANIES
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MHA completed its initial public offering with the admission of its shares to trading on AIM, with dealings to commence on Tuesday morning. MHA is an audit and assurance, tax, accountancy and advisory services provider. In conjunction with the admission, it has raised total gross proceeds of approximately GBP98 million through a placing with institutional and other investors of 95.8 million shares and a retail offer of 2.2 million shares, in both cases at 100p each. MHA's market capitalisation will be approximately GBP271 million on admission. "We are proud of what we have achieved so far, but we see even greater opportunity ahead," commented Chair Geoff Barnes. "Together with our partners and new investors, and united by a shared ambition to capitalise on that opportunity, we look forward to shaping the next chapter of the group's story as a public company, further enhancing the service we provide to clients, and achieving our medium-term goal of exceeding GBP500 million in annual revenues."
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By Emma Curzon, Alliance News reporter
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