2nd May 2025 07:48
(Alliance News) - The FTSE 100 was called higher on Friday, after the Chinese government suggested it is open to dialogue with Washington on trade policy.
"The lack of escalation in the trade war over the past week and dovish Federal Reserve (Fed) expectations certainly explain a major part of the recent gains," Swissquote's Ipek Ozkardeskaya commented. "But optimism remains fragile, and the Fed's ability to help depends on the trajectory of inflation."
She added: "[US] Orders have been falling since the start of the year, production is diving, and jobs are coming under pressure. Data released earlier this week hinted at lower job openings, a soft ADP report, and a jump in US initial jobless claims to the highest level since February."
In corporate news, Shell announced a USD3.5 billion share buyback but reported on-year decreases in its quarterly earnings.
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 58.8 points, 0.7%, at 8,555.60
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Hang Seng: up 1.5% at 22,447.02
Nikkei 225: up 1.0% at 36,803.00
S&P/ASX 200: up 1.1% at 8,228.00
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DJIA: closed up 83.60 points, 0.2%, at 40,752.96
S&P 500 closed up 0.6% at 5,604.14
Nasdaq Composite: closed up 1.5% at 17,710.74
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EUR: higher at USD1.1326 (USD1.1274)
GBP: higher at USD1.3314 (USD1.3283)
USD: lower at JPY145.17 (JPY145.50)
GOLD: lower at USD3,257.21 per ounce (USD3,311.72)
OIL (Brent): higher at USD62.49 a barrel (USD61.38)
(changes since previous London equities close)
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ECONOMICS
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Friday's key economic events still to come:
10:00 CEST eurozone manufacturing PMI
11:00 CEST eurozone unemployment
11:00 CEST eurozone CPI
09:55 CEST Germany manufacturing PMI
08:30 EDT US nonfarm payrolls
08:30 EDT US average weekly hours
10:00 EDT US factory orders
US total vehicle sales
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US President Donald Trump on Thursday signed an executive order aiming to slash public subsidies to PBS and NPR as he alleged "bias" in the broadcasters' reporting. The order instructs the Corporation for Public Broadcasting and other federal agencies "to cease Federal funding for NPR and PBS" and further requires that they work to root out indirect sources of public financing for the news organisations. The White House, in a social media posting announcing the signing, said the outlets "receive millions from taxpayers to spread radical, woke propaganda disguised as 'news'". It is the latest move by Trump and his administration to utilise federal powers to control or hamstring institutions whose actions or viewpoints he disagrees with. The move against PBS and NPR comes as his administration has been working to dismantle the US Agency for Global Media, including Voice of America and Radio Free Europe/Radio Liberty, which were designed to model independent news gathering globally in societies that restrict the press.
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Japan's unemployment rate was a notch higher in March, data published by the Statistics Bureau of Japan showed Friday. The country's unemployment rate increased to 2.5% in March from 2.4% in February. The FXStreet-cited consensus had expected it to remain put at 2.4% in March.
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Nigel Farage's Reform UK has secured victory by six votes over Labour in Runcorn & Helsby as Keir Starmer failed his first by-election test as UK prime minister. The narrow victory for new MP Sarah Pochin saw Reform taking a constituency which Labour won with a majority of almost 14,700 less than 12 months ago. The result came as Reform made gains against both Labour and the Conservatives across England in local contests, with Farage claiming a "big moment" was taking place in politics. The by-election was triggered when former Labour MP Mike Amesbury quit after admitting punching a constituent. Amesbury won 53% of the vote at the general election – and the defeat, along with Reform gains in other Labour heartlands, will cause unease in Downing Street.
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China is evaluating a US offer for negotiations on tariffs but wanted Washington to show "sincerity" and be ready to scrap levies that have roiled global markets and supply chains. Punishing US tariffs that have reached 145% on many Chinese products came into force in April while Beijing has responded with fresh 125% duties on imports from the US. High-end tech goods such as smartphones, semiconductors and computers have received a temporary reprieve from US tariffs. US President Donald Trump has repeatedly claimed that China has reached out for talks on the tariffs, and this week said he believed there was a "very good chance we're going to make a deal". Beijing's commerce ministry on Friday confirmed the US had reached out and that it was "currently evaluating" the offer. "If the US wants to talk, it should show its sincerity to do so, be prepared to correct its wrong practices and cancel unilateral tariffs," the ministry said.
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EU nations could commit to spending an extra USD56 billion on American products to end the tariff showdown with US President Donald Trump, EU Trade Commissioner Maros Sefcovic said in an interview with the Financial Times published Thursday. Sefcovic, who has been leading negotiations with the US administration, said that "certain progress" had been made but the EU would not accept the US' 10% tariff on EU goods. Sefcovic said that once US services are taken into account, the US trade deficit with the 27 EU nations is about EUR50 billion, or USD56 billion, a year. "If what we are looking at as a problem in the deficit is EUR50 billion, I believe that we can really ...solve this problem very quickly through [Liquefied Natural Gas] purchases, through some agricultural products like soyabeans, or other areas," the commissioner told the FT.
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Ukraine and Russia remain far from reaching a peace deal despite some recent progress, US Secretary of State Marco Rubio said on Thursday, warning that without a timely breakthrough, President Donald Trump may reconsider the US role in mediation. "They're closer, but they are still far apart and it's going to take a real breakthrough here very soon to make this possible," Rubio said in an interview with Fox News. Otherwise, Rubio added, "the president is going to have to make a decision about how much more time we're going to dedicate to this." He said that the US faces other pressing global issues, naming the trade conflict with China and Iran's nuclear plans as examples. Rubio reiterated that there was no military solution to the war in Ukraine, stating that Russian President Vladimir Putin cannot conquer the entire country, nor can Ukraine push Russian forces "back to where they were in 2014."
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BROKER RATING CHANGES
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Berenberg raises Endeavour Mining price target to 2,900 (2,800) pence - 'buy'
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RBC cuts Watches of Switzerland to 'sector perform' (outperform) - price target 375 (640) p
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Barclays cuts Kerry Group price target to 107 (110) EUR - 'overweight'
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COMPANIES - FTSE 100
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Shell has announced a USD3.5 billion share buyback alongside its first-quarter results. It said the programme covers an aggregate contract term of approximately three months, aiming for completion before Shell is scheduled to release its second-quarter results on July 31. In its first-quarter report, Shell's pretax profit fell 19% to USD8.60 billion from USD11.04 billion a year prior. Total revenue declined 6.1% to USD70.15 billion from USD74.70 billion. Attributable income decreased to USD4.78 billion from USD7.36 billion a year prior, while basic EPS decreased to 79 cents from USD1.14. Adjusted earnings before interest, tax, depreciation & amortisation fell to USD15.25 billion from USD18.71 billion. Oil and gas production available for sale decreased to 2,838 barrels of oil equivalent per day from 2,911 boe/d. Also, Shell declared a a first quarter dividend of 35.8 cents per share, up from 34.4 cents the year before, but unchanged from the fourth quarter of 2024.
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Standard Chartered reported higher profit for the first quarter of 2025, supported by broad-based income growth across wealth management, global markets and banking, despite increased credit impairments. The London-based lender said pretax profit rose 13% to USD2.10 billion in the three months to March 31 from USD1.91 billion a year earlier. Diluted earnings per share climbed 21% to 55.1 cents from 45.4 cents. Underlying net interest income rose 5.3% to USD2.80 billion from USD2.66 billion. Despite a volatile geopolitical environment and rising trade tensions, the bank maintained its full-year guidance, including a return on tangible equity approaching 13% by 2026. Underlying RoTE for the quarter rose to 16.4% from 15.2%. Standard Chartered's CET1 ratio was 13.8% at the end of March, down from 14.2% at year-end, mainly due to the USD1.5 billion share buyback announced in February. The bank said it remains well-capitalised and expects to return at least USD8 billion to shareholders between 2024 and 2026.
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NatWest reported total income of GBP3.98 billion for its first quarter, up 4.1% from GBP3.83 billion in the fourth quarter of 2024, and up 15% from GBP3.48 billion a year ago . Operating costs increased on-quarter to GBP1.98 billion from GBP2.27 billion. Attributable profit was GBP1.25 billion with earnings per share of 15.5 pence and a return on tangible equity of 18.5%, down on-quarter from 19.0%. Total income excluding notable items rose 2.1% on-quarter to GBP3.95 billion. Operating pretax profit increased on-quarter to GBP1.81 billion from GBP1.49 billion, and NatWest's CET1 ratio rose 20 basis points to 13.8%. For 2025, NatWest said it expects a RoTE at the upper end of the 15% to 16% guidance range.
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COMPANIES - FTSE 250
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Wizz Air said it carried 5.4 million passengers last month, up 11% from 4.9 million in April 2024. The airline also said seat capacity rose 11% to 6.1 million from 5.4 million while the load factor decreased to 89.8% from 90.3% "due to one-directional VFR traffic patterns during the Easter holiday period". "With Easter falling entirely in April this year, our new fiscal year started strongly, with a seasonal increase in passenger numbers in the month, as anticipated," Wizz Air said. "We expect this seasonal effect to normalise in the months ahead, consistent with historical trends."
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OTHER COMPANIES
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Ryanair said it carred 18.3 million passengers in April, up 6% from 17.3 million the prior year. The load factor rose to 93% from 92%.
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By Emma Curzon, Alliance News reporter
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