29th Apr 2025 07:49
(Alliance News) - Stocks were called higher on Tuesday, while new UK reports showed that UK food price inflation accelerated in April, retail HR directors expect a new Employment Rights bill to dent hiring, and rents both in and outside London continue to rise.
As for US trade policy, Swissquote's Ipek Ozkardeskaya commented: "The good news of the day is that it's been a few days since we last heard fresh attacks by Trump. It feels like he's been obliged to slow down the pace and intensity of his attacks.
"The bad news is, there is no clarity regarding the tariff situation, and the best outcome would be that the US keeps the 10% tariffs for everyone even if negotiations go well and lead to a favourable outcome."
She added: "A dovish shift in [Federal Reserve] expectations would be more than welcome, even though the Fed can't do much if [US] inflation picks up momentum."
In corporate news, Mobico reported a widened loss and announced that its CEO is stepping down.
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 20.9 points, 0.3%, at 8,438.24
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Hang Seng: up 0.1% at 21,984.77
S&P/ASX 200: up 0.9% at 8,070.60
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DJIA: closed up 114.09 points, 0.3%, at 40,227.59
S&P 500: closed up 0.1% at 5,528.75
Nasdaq Composite: closed down 0.1% at 17,366.13
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EUR: higher at USD1.1396 (USD1.1384)
GBP: higher at USD1.3414 (USD1.3389)
USD: lower at JPY142.37 (JPY142.73)
GOLD: lower at USD3,321.98 per ounce (USD3,326.61)
OIL (Brent): lower at USD64.20 a barrel (USD65.52)
(changes since previous London equities close)
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ECONOMICS
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Tuesday's key economic events still to come:
Japan Showa Day. Financial markets closed.
10:00 CEST eurozone money supply
11:00 CEST eurozone consumer confidence
09:00 CEST eurozone European Central Bank executive board member Piero Cipollone speaks
11:00 BST Ireland GDP
11:00 BST Ireland retail sales
10:40 BST UK Bank of England Deputy Governor Dave Ramsden speaks
08:30 EDT US trade balance
08:30 EDT US wholesale inventories
08:55 EDT US Redbook index
09:00 EDT US house price index
09:00 EDT US S&P/Case-Shiller home price index
10:00 EDT US consumer confidence
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UK shop price deflation slowed in April, as food price inflation sped up due to higher labour costs, data published by the British Retail Consortium and NielsenIQ showed. Shop price deflation decelerated to 0.1% on-year in April, from 0.4% in March. Non-food deflation slowed to 1.4% on-year in April from 1.9% in March, while food price inflation accelerated to 2.6% from 2.4% in March. Fresh food price inflation picked up to 1.8% annually in April from 1.4% in March. The data covers the first week of the month, from April 1 to April 7. BRC Chief Executive Helen Dickinson highlighted that everyday essentials such as bread, meat and fish all rose in price on a monthly basis in April, while UK retailers faced new employment costs, such as higher employment national insurance contributions and an increased national living wage.
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Retail HR directors, surveyed by the British Retail Consortium, are warning that the UK's proposed Employment Rights bill could dent hiring and job flexibility, as the sector struggles with rising costs and a fragile labour market. According to a survey conducted by the BRC, over 70% of HR directors at leading retailers believe the Bill, which is being debated in the House of Lords on Tuesday, will have a negative or very negative impact on their business. Fewer than one in ten thought it would be positive. More than half, 52%, said the legislation would lead to a reduction in staff numbers, while 61% predicted it would reduce flexibility in job offerings - a cornerstone of the retail sector where nearly half of the 3 million-strong workforce is employed part-time. The Bill's proposals for guaranteed working hours were singled out as a key concern, with retailers warning it would make part-time and flexible roles harder to offer. The BRC highlighted that such jobs are often vital stepping stones for people entering or returning to the workforce. Cost pressures were also a major worry, with 52% of respondents expecting the bill to push up prices for customers.
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Rents across the UK rose to a fresh record in early 2025, even as an increase in rental supply helped to slightly cool competition for properties, according to Rightmove. The property portal's latest rental trends tracker showed the average advertised rent outside London rose 0.6% quarter-on-quarter to GBP1,349 per calendar month in the first quarter, marking a new high. However, it was the slowest rate of growth for this time of year since 2020. In London, rents edged up by just 0.1% to GBP2,698 per month, the 14th consecutive quarterly record, and are now 2.5% higher than a year ago. The rise in rents came despite signs of easing pressure in the market. The number of new rental listings in March was 11% higher than a year earlier, with total available stock up 18%. Meanwhile, demand from prospective tenants slipped 7% year-on-year, helped by a rise in first-time buyer activity at the start of 2025. On average, rental homes received 12 enquiries each in the first quarter, down from 16 a year ago but still more than double the five seen in the first quarter of 2019. Regional differences persisted, with rental properties in London attracting eight enquiries each, compared with 18 in the North West.
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The UK will not have to "choose" between Europe and America, the government insisted amid leaks of a mooted UK-EU agreement on "free and open trade" in the face of US President Donald Trump's tariffs. A draft joint statement, being drawn up by London and Brussels ahead of a major summit in May, is said to outline "shared principles of maintaining global economic stability". The document reportedly says: "We confirmed our shared principles of maintaining global economic stability and our mutual commitment to free and open trade." It adds that both sides would "continue working on how we can mitigate the impact of fluctuations in the global economic order" and commits the UK and Brussels to "multilateralism". A government spokesperson said: "The government rejects the premise that it must choose between our European and American allies."
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German consumer morale rose heading into May as hopes for economic revival under the incoming government offset worries about the impact of US tariffs, a key survey showed Tuesday. The forward-looking indicator, published by pollsters GfK and the Nuremberg Institute for Market Decisions, NIM, came in at minus 20.6 points, a rise of 3.7 from the previous month. It was the second-straight increase for the regular survey of around 2,000 people, although the indicator remained at low levels as Europe's top economy struggles to recover from a lengthy downturn. US President Donald Trump's tariff onslaught is yet to have a "lasting impact on consumer sentiment in Germany," NIM consumer expert Rolf Buerkl said. The "negative effects" of US trade policy are "being offset by the conclusion of coalition negotiations and the prospect of a fully operational government," he added.
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Prime Minister Mark Carney won Canada's election Monday, leading his Liberal Party to a new term in power. The public broadcaster CBC and other outlets projected the Liberals would form Canada's next government, but it was not yet clear if they would hold a majority in parliament. Conservative leader Pierre Poilievre fell short of becoming prime minister, but his party was on track to form a strong opposition. Carney, who had never held elected office and only replaced Justin Trudeau as prime minister last month, previously served as central bank governor in both Canada and Britain. Trump's trade war and annexation threats outraged Canadians and made dealing with the US a top campaign issue. Carney anchored his campaign on an anti-Trump message, promising to expand Canada's overseas trading relationships to curb reliance on the US, a country he said "we can no longer trust". "Donald Trump wants to break us so America can own us," he said during the campaign. "They want our resources, they want our water, they want our land, they want our country. They can't have it." European Commission President Ursula von der Leyen congratulated Carney on his election win and said the bond between Europe and Canada was "growing stronger".
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BROKER RATING CHANGES
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UBS cuts United Utilities to 'neutral' (buy) - price target 1,150 (1,195) pence
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Morgan Stanley cuts Deliveroo to 'equal-weight' - price target 180 pence
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Shore Capital cuts RWS Holdings to 'hold' (buy)
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COMPANIES - FTSE 100
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BP announced a new USD750 million share buyback programme, after its USD1.75 billion share buyback completed on Friday. The oil major reported a first quarter pretax profit of USD3.13 billion, down 32% on-year from USD4.63 billion. Total revenue declined 4.2% to USD47.88 billion from USD49.96 billion. BP announced a dividend of 8 US cents per share, up 10% from 7.27c a year ago. Chief Executive Officer Murray Auchincloss said: "We continue to monitor market volatility and changes and remain focused on moving at pace. I'm confident that our plans to strengthen the balance sheet, reduce costs, and improve cash flow and returns will grow long-term shareholder value and strengthen the resilience of BP."
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Associated British Foods reported results for the 24 weeks ended March 1. Group revenue decreased 2% on-year to GBP9.51 billion from GBP9.73 billion, while pretax profit fell 21% to GBP692 million from GBP881 million. The interim dividend was unchanged at 20.7 pence. "These results reflect a robust performance in four of our five divisions," commented Chief Executive George Weston. "I am frustrated with the results in our Sugar business, but we are clear on what needs to be done by way of operational and regulatory solutions to improve financial performance. Primark delivered good growth in Europe and the US, with continued consumer caution in the UK. Primark's profit and margin delivery was strong and our low-cost operating model is working well." [Sugar had a GBP16 million adjusted operating loss, "primarily due to lower European sugar prices and an operating loss in Vivergo.] AB Foods kept full-year guidance mostly unchanged, continuing to target low-single digit sales growth, but said it now expects an adjusted operating loss of up to GBP40 million for Sugar.
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HSBC reported a drop in profit for the first quarter and announced a new share buyback programme while slashing its dividend. The London-based bank said pretax profit fell 25% to USD9.48 billion in the first quarter ended March 31 from USD12.65 billion a year earlier. Diluted earnings per share fell 28% to USD0.39 from USD0.54. Revenue declined 15% to USD17.65 billion from USD20.75 billion while net interest income was 4.0% lower at USD8.30 billion, down from USD8.65 billion. HSBC cut its quarterly dividend by 68% to USD0.10 per share from USD0.31 but announced plans to launch a USD3.00 billion share buyback. Looking ahead, HSBC said it expects muted demand for lending in 2025 due to economic uncertainty driven by US protectionism. "However, over the medium to long term we continue to expect mid-single digit percentage growth for year-on-year customer lending balances. We continue to expect double-digit percentage average annual growth in fee and other income in Wealth over the medium term," HSBC commented.
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COMPANIES - FTSE 250
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Mobico announced that CEO Ignacio Garat is stepping down effective from Wednesday, although he will remain in an advisory role for the next three months. Chair Designate Phil White will serve as executive chair on an interim basis from Thursday. At the same time Mobico reported its results for 2024, which include a GBP609.3 million pretax loss against the prior year's GBP120.1 million loss. Revenue rose 10% to GBP3.41 billion from GBP3.15 billion. The company declared no dividends for the year, down from 1.7p per share in 2023. Mobico said it "expects to make continued revenue and adjusted operating profit progress" in 2025.
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OTHER COMPANIES
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Jet2 released a full-year trading update and announced a buyback worth up to GBP250 million. The airline company expects the programme to run over the next six to nine months in two GBP125 million tranches, and cited "the group's sustainable cash generative business model and strong balance sheet, the board's continued confidence in the prospects for the business, as well as providing the opportunity to take advantage of prevailing market conditions to repurchase shares at favourable levels". ALso, for the year ended March 31, Jet2 expects to report between GBP565 million and GBP570 million in profit before foreign exchange revaluation and taxation, around 9% higher on-year and "in line with current market expectations". "On sale capacity for Summer 2025 is currently 8.3% higher than Summer 2024 at 18.6m seats, with our new bases at Bournemouth and London Luton airports contributing approximately 4% of this growth," the company said.
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By Emma Curzon, Alliance News reporter
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Related Shares:
Jet2AB FoodsMobico GroupHSBC HoldingsUnited UtilitiesDeliverooRWS HoldingsBP