27th Mar 2025 06:57
(Alliance News) - Stocks in London are set to open lower on Thursday, following the announcement of US President Donald Trump's new 25% tariffs on imported cars and the release of data showing a prolonged decline in the UK car manufacturing sector.
Investors also continue to digest Wednesday's spring statement by Rachel Reeves, as she set out savings of around GBP14 billion.
IG says futures indicate the FTSE 100 to open 31.4 points lower, 0.4%, at 8,658.19 on Thursday. The index of London large-caps closed up 25.79 points, 0.3%, at 8,689.59 on Wednesday.
Sterling was quoted at USD1.2927 early Thursday, higher than USD1.2894 at the London equities close on Wednesday.
The euro traded at USD1.0781 early Thursday, down from USD1.0788 late Wednesday. Against the yen, the dollar was quoted lower at JPY150.41 versus JPY150.53.
"UK markets, on the whole, took the spring statement in their stride, with gilts digesting the statement more easily upon confirmation that the year-ahead issuance remit stood at GBP299 billion, marginally below consensus expectations, and with a much heavier than expected tilt towards issuance at the front-end. Cooler-than-expected inflation data earlier in the day, with CPI having risen 2.8% YoY in February, also provided a bit of a helping hand, though with services inflation still running at 5.0% YoY, expecting anything beyond quarterly 25bp cuts from the Old Lady still feels overly-ambitious," said Pepperstone analyst Michael Brown.
In Asia on Thursday, the Nikkei 225 index in Tokyo was down 0.9%. In China, the Shanghai Composite was 0.3% higher, while the Hang Seng index in Hong Kong was up 0.9%. The S&P/ASX 200 in Sydney closed down 0.4%.
In the US on Wednesday, Wall Street ended lower, with the Dow Jones Industrial Average down 0.3%, the S&P 500 fading 1.1% and the Nasdaq Composite slipping 2.0%.
President Donald Trump has announced 25% tariffs on cars imported into the US in a bid to boost the domestic auto industry. It will go into effect on April 2 and apply to all cars not made in the US, meaning even US manufacturers with models made overseas would be hurt under the scheme.
The tariffs are the latest in a slew of levies the US president has imposed since taking office. As it stands, Trump has introduced a 20% tariff on all imports from China and a 25% global tariff on imported steel and aluminium products.
Trump on Thursday has also threatened to hit the EU and Canada with more tariffs if they work together "to do economic harm" to the US.
Trump's newest tariff has "immediately reignited concerns about an escalating trade war," commented XS.com analyst Linh Tran.
"Additionally, the White House left open the possibility of imposing additional tariffs on technology products and electronic components from China.
"This move not only directly impacts US technology companies but also indirectly pressures global financial markets, increasing demand for gold as a safe-haven asset. However, the impact of this news on gold remains uncertain as investors await China's response and potential countermeasures from the US government."
Gold was quoted at USD3,027.77 an ounce early Thursday, higher than USD3,018.09 on Wednesday.
Brent oil was trading at USD73.69 a barrel early Thursday, lower than USD73.95 late Wednesday.
Meanwhile, UK car production has fallen for the twelfth month in a row, data from the Society of Motor Manufacturers and Traders showed.
The total for cars and commercial vehicles was down by 11.6% in February to 82,178 compared with a year ago. Manufacturers turned out 10,787 fewer cars, vans, trucks, taxis, buses and coaches than in last February, with model changeovers and plant restructuring among the reasons, said the SMMT.
The SMMT said Wednesday's spring statement by the chancellor offered no support for the industry or consumers, describing it as a "missed opportunity".
In Thursday's corporate calendar, full-year results from retailer Next.
In the economic calendar on Thursday, US initial jobless claims, quarterly personal consumption expenditures and GDP figures at 1230 GMT.
By Emily Parsons, Alliance News reporter
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