1st Apr 2025 06:53
(Alliance News) - Stocks in London are set to open higher on Tuesday, recovering some of Monday's lost ground, on the eve of 'liberation day'.
"April 2nd is shaping up as one of the more layered market riddles in recent memory. The tariff rhetoric has reached full crescendo—deafening in volume, yet maddeningly vague in detail. Markets are flush with speculation, but real pricing clarity is MIA, and the uncertainty premium is sky-high," SPI Asset Management analyst Stephen Innes commented.
IG says futures indicate the FTSE 100 to open 36.6 points higher, 0.4%, at 8,546.21 on Tuesday. The index of London large-caps closed down 76.04, 0.9% at on 8,582.81.
US President Donald Trump said Monday he would be "very kind" to trading partners when he unveils further tariffs this week, risking global turmoil to address what he says are unfair trade imbalances.
Trump – who has been making unprecedented use of presidential powers since taking office in January – said he could announce as early as Tuesday night exactly what "reciprocal tariffs" will be imposed.
The Republican billionaire insists that reciprocal action is needed because the world's biggest economy has been "ripped off by every country in the world," promising "Liberation Day" for the US.
He could also unveil more sector-specific levies.
Asked for details, he told reporters Monday: "You're going to see in two days, which is maybe tomorrow night or probably Wednesday."
Against the dollar, sterling rose to USD1.2924 early Tuesday, from USD1.2904 at the time of the London equities close on Monday. They euro climbed to USD1.0814 from USD1.0801. Against the yen, the dollar bought JPY149.86, unmoved from JPY149.85.
In China, the Shanghai Composite was up 0.3% on Tuesday. The Hang Seng Index in Hong Kong was also up 0.3%. Tokyo's Nikkei 225 was 0.4% higher, while Sydney's S&P/ASX 200 rose 1.0%.
Expansion in China's manufacturing sector accelerated in March, numbers released by S&P Global on Tuesday showed.
The Caixin China manufacturing purchasing managers' index rose to 51.2 in March, up from 50.8 in February.
A reading above the 50.0 neutral mark indicates an overall increase in business activity from the previous month, while a reading below signals a contraction.
Japan's manufacturing downturn deepened further in March, figures from S&P Global showed. The au Jibun Bank Japan manufacturing purchasing managers' index fell to 48.4 in March from 49.0 in February.
The Reserve Bank of Australia left interest rates unchanged on Tuesday, and said it needs to be "cautious about the outlook".
The cash rate target was maintained at 4.10%. It had cut by 25 basis points in February.
"There are notable uncertainties about the outlook for domestic economic activity and inflation. The central projection is for growth in household consumption to continue to increase as income growth rises. But there is a risk that any pick-up in consumption is slower than expected, resulting in continued subdued output growth and a sharper deterioration in the labour market than currently expected. Alternatively, labour market outcomes may prove stronger than expected, given the signal from a range of leading indicators," the RBA said.
"Uncertainty about the outlook abroad also remains significant. On the macroeconomic policy front, recent announcements from the United States on tariffs are having an impact on confidence globally and this would likely be amplified if the scope of tariffs widens, or other countries take retaliatory measures. Geopolitical uncertainties are also pronounced. These developments are expected to have an adverse effect on global activity, particularly if households and firms delay expenditures pending greater clarity on the outlook. Inflation, however, could move in either direction."
The RBA said there has been a "welcome" decline in underlying inflation but there are still "risks on both sides".
Gold traded at USD3,146.65 an ounce early Tuesday, rising from USD3,116.44 at the time of the London equities close on Monday. A barrel of Brent advanced to USD74.95 from USD74.42.
In New York on Monday, the Dow Jones Industrial Average rose 1.0%, the S&P 500 added 0.6%, but the Nasdaq Composite fell 0.1%.
Tuesday's economic calendar has a host of PMI readings, including the eurozone at 0900 BST, the UK at 0930 and a pair from US at 1445 and 1500. Elsewhere, there is eurozone inflation and unemployment data at 1000.
By Eric Cunha, Alliance News news editor
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