4th Feb 2025 06:51
(Alliance News) - London's FTSE 100 is set to open lower on Tuesday, with simmering trade tensions continuing to keep a lid on enthusiasm.
Asian stocks perked up, however, despite China hitting back at US President Donald Trump's tariffs.
IG says futures indicate the FTSE 100 to open 16.9 points lower, 0.2%, 8,566.66 on Tuesday. The index of London large-caps closed down 90.40 points, 1.0%, at 8,583.56 on Monday.
The pound fell to USD1.2398 early Tuesday from USD1.2414 late Monday. The euro faded to USD1.0294 from USD1.0307. Against the yen, the dollar rose to JPY155.24 from JPY154.61.
Trump delayed the start of tariffs on Mexico and Canada for a month Monday after the US neighbours struck last-minute deals to tighten border measures against the flow of migrants and the drug fentanyl.
After calls with Trump just hours before the US tariffs were due to take effect, both Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum struck deals for a postponement.
Trump said that after "very friendly" talks with Sheinbaum he'd "immediately pause" the tariffs on Mexico, and that his counterpart had agreed to send 10,000 troops to the US-Mexico frontier.
Tensions appeared higher between the US and Canada, but after two separate calls Trump later said he was "very pleased" and was announcing a 30-day halt in the tariffs.
But China said Tuesday it would impose tariffs of 15% on imports of coal and liquefied natural gas from the US, in retaliation for Washington's 10% levies on Chinese goods.
Beijing's finance ministry also unveiled 10% tariffs on imports from the US of crude oil, agricultural machinery, large-displacement vehicles and pickup trucks.
Commerzbank analyst Antje Praefcke commented: "The market doesn't really have much time to digest the shocking news; it comes thick and fast. The US president has shown that he is quite prepared to push through his trade policy and snub long-standing contractual partners in order to force concessions. Trump could take on more trading partners at any time – the EU is presumably at the top of the list here. The risk of new news about new tariffs coming at any time predominates. And who would seriously want to bet against the USD's strength as long as Trump is flexing his muscles on the big stage. Because the next shock is bound to come, and this will probably be dollar-positive again."
The Hang Seng Index in Hong Kong was 2.4% higher in afternoon dealings on Tuesday. In Tokyo, the Nikkei 225 was up 0.7%. In Sydney, the S&P/ASX 200 fell 0.1%.
A barrel of Brent fell to USD75.24 early Tuesday, from USD75.65 at the time of the London equities close on Monday. Gold traded at USD2,811.91 an ounce, falling from USD2,819.29. The precious metal spiked above the USD2,830 mark on Monday, its best ever level.
In New York on Monday, the Dow Jones Industrial Average fell 0.3%, the S&P 500 declined 0.8% and the Nasdaq Composite shed 1.2%.
The economic calendar for Tuesday has US factory order data at 1500 GMT.
Tuesday's UK corporate calendar sees half-year results from Guinness owner Diageo, a trading statement from telecommunications firm Vodafone and full-year results from housebuilder Crest Nicholson.
Elsewhere, there are results from Google owner Alphabet, chipmaker Advanced Micro Devices and soft drinks and snacks producer PepsiCo.
Already out, Swiss bank UBS reported growth in fourth-quarter earnings and announced a buyback.
Total revenue in the final three months of 2024 rose 7.2% to USD11.64 billion from USD10.86 billion a year prior. Pretax operating profit totalled USD1.05 billion, swinging from a loss of USD751 million.
UBS announced it plans to buyback USD1 billion worth of shares in the first half of 2025, and an additional USD2 billion in the second.
By Eric Cunha, Alliance News news editor
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