12th May 2025 07:49
(Alliance News) - London's FTSE 100 is set to open higher on Monday, as the US claims to have reached a trade deal with China and the UK presses forward with further tariff negotiations.
US Trade Representative Jamieson Greer said further details on the US-China deal would be announced on Monday, while the Chinese side, led by Vice Premier He Lifeng, did not comment after concluding the talks in Geneva.
"The foretaste of de-escalation is giving a boost to risk appetite this morning - though gains in Asian indices remain moderated," commented Swissquote analyst Ipek Ozkardeskaya.
"European and US futures are in the green and pointing to a solid start to a promising day. Nasdaq futures are leading the gains with an almost 2% advance in the early hours of the trading week, while pharma stocks are under pressure on Trump's plans to order a cut in US prescription drug costs – he doesn't want Americans to pay more than people in countries with the lowest price".
Meanwhile, a survey reveals that one in four UK employers are planning redundancies within the next three months, as levels of staff increases are expected to hit a new record low.
In early corporate news, Victrex's interim profit jumps more than five times higher and Cobalt Holdings eyes a June initial public offering in London.
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 0.4% at 8,582.05
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Hang Seng: up 1.4% at 23,182.29
Nikkei 225: closed up 0.4% at 37,655.32
S&P/ASX 200: closed up 0.1% at 8,237.20
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DJIA: closed down 119.07 points, or 0.3%, at 41,249.38
S&P 500: closed down 4.03 points, or 0.1%, at 5,659.91
Nasdaq Composite: closed up 0.78 points at 17,928.92
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EUR: down at USD1.226 (USD1.1263)
GBP: down at USD1.3292 (USD1.3299)
USD: up at JPY146.05 (JPY145.18)
Gold: down at USD3,279.85 per ounce (USD3,342.57)
(Brent): up at USD64.82 a barrel (USD63.66)
(changes since previous London equities close)
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ECONOMICS
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Monday's key economic events still to come:
09:00 BST UK Bank of England Deputy Governor Clare Lombardelli speaks
11:30 BST UK Bank of England Monetary Policy Committee member Megan Greene speaks
13:50 BST UK Bank of England Monetary Policy Committee member Catherine Mann speaks
17:00 BST UK Bank of England Monetary Policy Committee member Alan Taylor speaks
19:00 BST US monthly budget statement
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Migrants will be told they need to spend up to a decade in the UK before they can apply for citizenship and English language requirements will be increased as part of the government's immigration crackdown. Keir Starmer will promise to "tighten up" all elements of the system as ministers look to bring down net figures, but are facing pushback against plans to stop foreign recruitment of care workers. The prime minister is expected to say that "enforcement will be tougher than ever and migration numbers will fall" as a result of the policies in the Immigration White Paper, set to be unveiled on Monday. Meanwhile, the Home secretary has been warned that plans to stop overseas recruitment for care worker visas are "cruel", and the head of a nursing union is expected to accuse the government of "pandering and scapegoating" with the policy. Yvette Cooper said on Sunday that the overseas recruitment for care worker visas will be stopped, as part of plans to reduce "lower-skilled" visas by "up to 50,000" in the next year.
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The UK will on Monday host European ministers for "critical" talks on "repelling Russian aggression", two days after Ukraine's allies demanded that Moscow accept a ceasefire. Representatives from France, Germany, Italy, Poland, Spain and the EU will join Foreign Secretary David Lammy in London for a meeting of the so-called "Weimar+" group. The coalition was set up in February in response to shifting US policy towards the war between Ukraine and Russia, and European security in general under President Donald Trump. The meeting follows Saturday's visit by the leaders of France, Germany, Poland and the UK to Kyiv, where they called for Russia to agree to an unconditional 30-day ceasefire to allow for peace talks – a proposal they said was backed by the US. Russian President Vladimir Putin on Sunday proposed direct negotiations with Ukraine in Istanbul on May 15, but did not respond to the European call for a 30-day ceasefire. Ukrainian President Volodymyr Zelensky said he would be prepared to meet Putin in Turkey, but did not say whether he would still attend if Russia refused the European proposal. The London meeting, where Lammy is expected to announce further sanctions targeting those backing Russia's invasion, will be the sixth gathering of the Weimar+ group and the first hosted by the UK. The talks will cover "repelling Russian aggression and bolstering European security", said the UK Foreign Office. They will focus on "both our joint efforts to strengthen European security and securing a just and lasting peace for Ukraine", it added. Lammy will be joined by his German, Spanish and Polish counterparts, while France will be represented by its minister for Europe Benjamin Haddad.
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The US claims to have reached a deal in its tariff dispute talks with China. US Trade Representative Jamieson Greer said further details would be announced on Monday. The Chinese side, led by Vice Premier He Lifeng, did not comment after concluding the talks in Geneva. President Trump hailed early Sunday a "total reset" in US-China trade relations following the first day of talks between top US and Chinese officials aimed at de-escalating tensions sparked by his aggressive tariff rollout.
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Trump will stand firm on the blanket 10% tariff on most UK imports into the US, his press secretary has indicated. Karoline Leavitt told a White House press briefing that the US president is "committed to the 10% baseline tariff" imposed in April "not just for the UK, but for his trade negotiations with all other countries as well". The 10% levy remained in place following Thursday's deal between the UK and the US, but the business secretary had said negotiations with the US on it were set to continue.
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Prime Minister Keir Starmer's ambassador in Washington has said he is "looking forward" to negotiating with the US to "bring down further tariffs". Peter Mandelson told the BBC that Thursday's deal between the UK and US represents a "platform for going further and opening up more trade opportunities", as the prime minister declined to rule out the possibility of changes to taxes on technology companies in a future trade deal. Mandelson told Newsnight: "I'm very pleased with what we've achieved. It's taken many months of very tough negotiation, and it's also a platform going further and opening up more trade opportunities."
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The number of UK employers expecting to increase staff numbers in the next three months has fallen to a record low outside of the pandemic, new research suggests. A survey of 2,000 businesses found issues such as rising employment costs and growing global uncertainties. The Chartered Institute of Personnel & Development said the rate of employers expecting to increase headcount has fallen sharply among large private sector employers, and in retail in particular. One in four employers plan to make redundancies in the next three months, said the report.
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President Trump will sign an executive order to lower the price of prescription drugs and pharmaceutical products. "Prescription Drug and Pharmaceutical prices will be REDUCED, almost immediately, by 30% to 80%," Trump said in a social media post. "They will rise throughout the World in order to equalize and, for the first time in many years, bring FAIRNESS TO AMERICA!" Trump said he planned to institute a "MOST FAVORED NATION'S" policy that pinned the cost of drugs sold in the US to the lowest price paid by other countries for the same drug. The reduction in prescription drug costs in the US would, he added, be counterbalanced by higher costs in other countries.
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Russian President Vladimir Putin proposed direct negotiations in the coming days to end the conflict in Ukraine but did not address a 30-day ceasefire proposal drawn up hours earlier by European allies of Kyiv, reportedly with US backing. Speaking at the Kremlin in the early hours of Sunday, Putin proposed direct talks with Ukraine in Istanbul on May 15 – hours after Kyiv and the leaders of France, Germany, the UK and Poland had called for an unconditional 30-day ceasefire to start on Monday. "We propose to the Kyiv authorities to resume the talks that they broke off in 2022, and, I emphasise, without any preconditions," Putin said. Ukrainian President Volodymyr Zelensky said he is ready to meet the Russian president in Turkey. "We await a full and lasting ceasefire, starting from tomorrow, to provide the necessary basis for diplomacy. There is no point in prolonging the killings," Zelensky wrote on X on Sunday.
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BROKER RATING CHANGES
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UBS raises Imperial Brands price target to 3,350 (3,100) pence - 'buy'
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Jefferies raises Renishaw to 'hold' (underperform) - price target 2,450 (2,890) pence
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UBS cuts Ceres Power price target to 120 (480) pence - 'buy'
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COMPANIES - FTSE 100
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Anglo American taps Tom McCulley as its new technical director, with immediate effect following former Technical & Operations Director Matt Daley's decision to take up an external senior executive role after eight years at the company. Daley will work with McCulley over the coming months prior to his departure later in 2025, to ensure a smooth transition. McCulley will retain his responsibility for Anglo American's Crop Nutrients business, and will continue as a member of the firm's executive leadership team.
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COMPANIES - FTSE 250
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Victrex reports pretax profit of GBP17.2 million for the six months that ended March 31, jumping from GBP3.3 million a year prior. This was driven by revenue growth of 4.7% to GBP145.9 million from GBP139.3 million, as well as a one-off GBP20.1 million exceptional items charge the year before. Victrex maintains an interim dividend of 13.42 pence per share. Group sales volumes rose 16% on-year to 2,018 tonnes from 1,737 tonnes. "Macroeconomic uncertainty is likely to continue for the remainder of [financial 2025]," says Chief Executive Officer Jakob Sigurdsson. "Whilst the majority of Victrex's product portfolio is currently exempt from incremental US tariffs, we are mindful of the potential impact on global sales demand. Volume momentum remains positive and we are slightly upgrading our volume guidance to high-single digit volume growth for the full year, reflecting the volume strength seen in H1." Victrex is targeting "substantial improvement" in second-half pretax profit compared to its first half, due to current volume momentum within its Sustainable Solutions unit, as the firm aims to deliver profit in line with the second half of 2024. Its full-year profit headwind for its Chinese manufacturing facility will be higher than previously guided, the firm also noted.
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OTHER COMPANIES
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Alphawave IP further extends the deadline for Qualcomm to make a firm takeover offer to May 27, from the previously-extended deadline on May 12. The firms have been in talks for a potential deal since the beginning of April, though Alphawave notes that there can be no certainty that a firm offer will be made, nor on the terms of any potential offer.
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Cobalt Holdings announces its intention to float on the Main Market of the London Stock Exchange and to admit its shares to the Equity Shares (Commercial Companies) category of the UK Financial Conduct Authority's Official List. Admission is expected in June. The electric vehicle battery material maker intends to raise around USD230 million via its "global offer", which comprises the issue of 90 million shares. The firm has agreed a six-year supply contract with Glencore for the supply of cobalt worth up to USD1 billion, as well as a further supply contract to acquire up to 1,500 tonnes of cobalt from Anchorage in 2031. Cobalt has made an initial USD200 million purchase of cobalt from Glencore at a discount to Monday's spot price. "Our strategy is simple: to provide equity investors with direct, pure-play exposure to the price of cobalt through a low-risk, low-cost business model that sees us buying physical cobalt and holding it for the long-term," says Cobalt Chief Executive Officer Jake Greenberg. "We anticipate that supply and demand will come back into balance over the coming years and will create the necessary conditions to incentivise investment in new mines and refining capacity in the West, all of which are essential to deliver the energy transition."
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FRP Advisory acquires business management consultant One Advisory Group for GBP5.6 million, plus around GBP2.5 million in additional consideration for net assets acquired upon completion. The payment will be split between around GBP6.5 million in cash and the issue of new shares to the value of around GBP1.6 million. One Advisory delivered revenue of GBP4.7 million in its most recent financial year that ended March 31, alongside earnings before interest, tax, depreciation and amortisation of GBP1.1 million. Looking ahead, its underlying incremental contribution to FRP is expected to be revenue of around GBP4.9 million and about GBP1.1 million in adjusted Ebitda. "This acquisition further strengthens our national financial advisory business. One Advisory will continue to provide governance advisory services under their existing brand and their financial reporting and transaction advisory team will go to market as FRP," says FRP Chief Executive Officer Geoff Rowley.
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By Emily Parsons, Alliance News reporter
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