10th Feb 2025 17:04
(Alliance News) - Stock prices in London closed higher on Monday, as investors appear to remain unphased by US President Donald Trump's earlier threats of 25% tariffs on steel and aluminium imports.
However, UK steel industry representatives have urged UK Prime Minister Keir Starmer to act to protect it from Trump's threatened levy, warning that the move would be a "devastating blow".
The UK government is waiting to see details of Trump's policy, but industry body UK Steel called for decisive action from ministers. Director General Gareth Stace said such tariffs would "damage over GBP400 million worth of the steel sector's contribution to the UK's balance of trade" and called the news "deeply disappointing...given our relatively small production volumes compared to major steel nations".
There are fears within the industry that US tariffs could also see exports from other countries – such as China – diverted to the UK, heaping further pressure on the domestic industry.
The FTSE 100 index closed up 67.27 points, 0.8%, at 8,767.80. The FTSE 250 ended up 217.75 points, 1.1%, at 21,025.59, and the AIM All-Share closed up 0.8%, or 5.55 points, at 724.59.
The Cboe UK 100 ended up 0.9% at 878.88, the Cboe UK 250 closed up 1.1% at 18,352.37, and the Cboe Small Companies ended up 0.1% at 15,835.01.
BP topped the FTSE 100 index, gaining 7.4%.
The London-based oil major, which reports its 2024 results on Tuesday, is expected to post fourth-quarter underlying replacement cost profit of USD1.26 billion, a decline of 58% from USD2.99 billion a year prior.
Also, on Monday Bloomberg reported that Elliott Investment Management has built a significant stake in BP, and has called on it to consider transformative measures. The activist investor reportedly believes that BP is significantly undervalued and its performance is disappointing.
"BP boss Murray Auchincloss was already under pressure to deliver something big at the company’s Capital Markets Day on 26 February, but the arrival of activist investor Elliott on the oil major’s share register means the strategy presentation really had better be good...or Elliott may start to agitate for major change at BP, in one way, shape or form" commented AJ Bell's Russ Mould.
"Like many so-called ‘activist’ investors, Elliott does not immediately make a hostile approach to the board of a company where it feels there is value ready to be unlocked. It will seek a more ‘suggestivist’ approach as it puts its ideas across. But if those ideas are rejected out of hand, then those suggestions could be made in a more strident, public manner and even lead to campaigns for board representation so that Elliott can help to oversee implementation of its ideas."
British Airways owner International Consolidated Airlines was the biggest loser, falling 3.0% after Goldman Sachs cut it from 'buy' to 'neutral', although it increased its price target to 375 pence from 300p.
"While valuation does not seem overly expensive in terms of headline numbers, we no longer see a good enough risk-adjusted return for a buy rating," analysts at Goldman said in a research note.
Goldman projects for IAG an earnings before interest and tax margin of 14% in 2025, which compares to a 2014 to 2019 average of 12%, and has only been surpassed in 2015.
On this basis its 2025 Ebit estimate of EUR4.5 billion is in line with consensus. But unlike a year ago "we are not convinced the company can now durably and materially beat these higher expectations," Goldman said.
Carnival was near the bottom of the FTSE 250, down 1.6%.
The Florida-based cruise operator has closed a previously announced private offering of USD2.0 billion of 6.125% of senior unsecured notes due in 2023.
It said it utilised the net proceeds from the offering, coupled with on-hand cash, to redeem USD2.03 billion 10.375% senior priority notes due 2028 of Carnival Holdings (Bermuda) Ltd, causing an over 4% reduction in interest expense.
Spectris had a better day, rising 2.1%.
JPMorgan sees "multiple drivers" of upside to earnings at Spectris as end-markets take a turn for the better, saying that it appears to be "through the downgrade cycle".
As a result, the broker upgraded the London-based supplier of precision instrumentation and controls to 'overweight' from 'neutral' and increased its June 2026 share price target to 3,450 pence from 2,650p before.
JPMorgan's analysis points to key end markets now improving, or bottoming, with multiple drivers of upside versus consensus expectations, leaving its 2025 adjusted earnings before interest, tax and amortisation forecast 5% ahead with a "blue-sky" scenario 9% above expectations.
Drax gained 3.8%.
The Yorkshire, England-based power generator said it has agreed heads of terms with the UK government for the operation of Drax Power Station after 2027.
The contract for difference scheme has a strike price of GBP113 per megawatt-hour applied to all four biomass units, Drax said. The contract period stretches from April 2027 to March 2031.
The firm said it is targeting average earnings before interest, tax, depreciation and amortisation of GBP100 million to GBP200 million per year from the power station over the agreement period.
Among small caps, Porvair ended 5.3% higher.
The filtration technology company said pretax profit rose 4.0% to GBP20.9 million in the year ended November 30, while basic EPS increased 2.9% to 35.8 pence from 34.8p. Revenue rose 9.4% to GBP192.6 million.
Porvair also recommended a final dividend of 4.2p, up 5.0% from 4.0p a year prior, bringing the full year dividend to 6.3p, also up 5.0%, from 6.0p.
CAB Payments meanwhile lost 10%.
The London-based payment processing and foreign exchange provider said its Chief Financial Officer Richard Hallett has stepped down with immediate effect.
Head of Banking Matthew Talty will temporarily assume the role until CAB finds a permanent replacement.
In European equities on Monday, the CAC 40 in Paris ended up 0.5%, while the DAX 40 in Frankfurt ended up 0.7%.
In response to Trump's tariff threats, Germany said Europe would act in a "united and determined manner" while France warned that the EU will counter in kind and "replicate" any tariffs imposed on it by the US.
"In the long term, a tariff conflict only has losers," Robert Habeck, the German economy minister and vice chancellor, said in a statement. Habeck's ministry meanwhile said he had spoken on the phone about Trump's announcement with EU Trade Commissioner Maros Sefcovic and with business groups.
The pound was quoted at USD1.2381 at the London equities close Monday, lower compared to USD1.2400 at the close on Friday.
"The impact of Trump's promise to impose tariffs on steel and aluminium imports has been fairly muted in the FX markets so far in the day," commented StoneX analyst Fawad Razaqzada. As traders await clarity, they are also keeping an eye on the bond market, where yields have started to push higher again on fears about inflation.
"With Federal Reserve Chair Jerome Powell's testimony, US CPI data, and key corporate earnings due this week, the GBP/USD forecast remains cautiously bearish following last week's dovish rate cut by the Bank of England."
The euro stood at USD1.0311 at the European equities close Monday, lower against USD1.0333 at the same time on Friday.
Against the yen, the dollar was trading higher at JPY151.75 compared to JPY151.24 late Friday.
Stocks in New York were higher at the London equities close, with the DJIA up 0.1%, the S&P 500 index up 0.6%, and the Nasdaq Composite up 1.1%.
In other US news, the Trump administration has informed staff at the US consumer protection agency that it is temporarily shuttering its headquarters and pausing all work, according to an email shared Monday with AFP.
In the message to staff, Russell Vought - the acting director of the Consumer Financial Protection Bureau, and Trump's new director of the White House Office of Management & Budget - said the CFPB's Washington office would be closed this week, and told employees not to show up.
The Consumer Financial Protection Bureau was set up in the wake of the 2008 global financial crisis and is tasked with protecting American consumers from corporate misconduct.
Meanwhile in Middle Eastern news, Palestinian militant group Hamas said it will indefinitely postpone the next release of Israeli hostages - planned for Saturday, February 15 - and accused Israel of failing to comply with its terms.
Brent oil was quoted higher at USD75.88 a barrel at the London equities close Monday from USD74.59 late Friday.
Gold was quoted higher at USD2,903.38 an ounce at the London equities close Monday against USD2,859.53 at the close on Friday.
In Tuesday's UK corporate calendar, as well as BP there are full-year results from Wynnstay and half-year results from Dunelm, PZ Cussons and MJ Gleeson.
The economic calendar for Tuesday has comments from Fed Chair Jerome Powell and Bank of England Governor Andrew Bailey. Also, look out for UK retail sales data.
By Emma Curzon, Alliance News reporter
Comments and questions to [email protected]
Copyright 2025 Alliance News Ltd. All Rights Reserved.