24th Jul 2026 06:56
(Alliance News) - Stocks in London are set to open lower on Friday, with conflict worry and now tariff concerns hitting equity market enthusiasm.
The Brent price remains above USD100 a barrel, stoking inflation fears. Over in New York, tech shares struggled as earnings from Alphabet and Tesla "failed to reassure investors".
Still to come on Friday is a slew of preliminary purchasing managers' index data for July.
IG says futures indicate the FTSE 100 to open 21.0 points lower, 0.2%, at 10,618.17 on Friday. The index of London large-caps closed down 0.7% at 10,639.17 on Thursday, but is up 0.4% so far this week.
The US said Thursday that it would impose new tariffs on 60 trading partners over forced labour concerns, replacing an expiring global duty rolled out by President Donald Trump earlier this year.
The levies, which take effect Friday, range from 10% to 12.5%.
Under Thursday's announcement, economies that have implemented a forced labour prohibition are hit with the lower 10% rate. They include Canada, the EU and the UK.
Others were deemed to deserve harsher levies, receiving the higher 12.5% tariff, a US official told reporters. Trading partners like China and Japan are covered in this group.
Sterling advanced to USD1.3315 early Friday, from USD1.3303 at the time of the London equities close on Thursday. Against the euro, it traded at EUR1.1693, edging slightly lower from EUR1.1696.
The euro rose to USD1.1382 from USD1.1370. Against the yen., the buck bought JPY163.81, down from JPY163.88.
In Tokyo on Friday, the Nikkei 225 was down 2.9% in late trade. The Shanghai Composite was down 1.4%, while the Hang Seng Index in Hong Kong was also down 1.4%. The S&P/ASX 200 was 0.7% lower.
In New York on Thursday, the Dow Jones Industrial Average fell 1.0%, the S&P 500 declined 1.2%, and the Nasdaq Composite slumped 2.1%.
Swissquote analyst Ipek Ozkardeskaya commented: "The S&P 500 had its worst day of July, as the first earnings reports from two big tech hyperscalers failed to reassure investors.
"Earnings themselves were not the problem; spending and evaporating free cash flow were. Both Alphabet and Tesla stood by their capital investment plans, while Alphabet raised its capex outlook by USD15 billion to USD205 billion. Meanwhile, free cash flow at both Alphabet and Tesla turned negative in the second quarter. For the latter, it is not a big deal, but for the former, it is.
"It means big tech – that used to be capital light and cash heavy – is now turning capital heavy and cash light, increasingly relying on stock and bond issuance to finance additional AI spending at a time when interest rate expectations are rising."
The yield on the US 10-year Treasury was steady at 4.71%, while the 30-year yield eased to 5.17% from 5.18% at the time of the London equities close on Thursday.
A barrel of Brent eased to USD100.16 on Friday morning from USD100.98 late Thursday. Gold ebbed to USD4,027.15 an ounce from USD4,047.56.
Tehran said Friday that US President Donald Trump's threat to pay for shipping damage with Iranian assets was an "incendiary precedent".
Trump had said that Washington would start using frozen Iranian assets "that the US has in its possession, and controls" to pay for "any and all damages done to Ships, Cargo or anything related" in the region.
UK consumer confidence improved in July, survey results showed on Friday.
The overall score for the GfK UK consumer confidence index rose to minus 17 points in July from minus 23 points in June.
A reading of minus 21 was expected based on the consensus forecast cited by FXStreet.
Neil Bellamy, consumer insights director at GfK, said: "Hot on the heels of the summer heatwaves, July has delivered a wave of optimism...The lion's share of the improvement is in the economy, with a ten-point advance in how consumers view the past year and an eight-point gain for the next 12 months.
"The sense of a fresh start following the appointment of a new prime minister surely accounts for some of this bounce. There were also hopes at the start of July that the Middle East conflict might stabilise and bring UK fuel prices down. The feel-good factor of the FIFA World Cup will have reinforced sentiment too."
Friday morning has a UK retail sales reading at 0700 BST. There is a UK flash PMI reading at 0930, after eurozone data at 0900, before a US reading at 1445.
In early corporate news, Allianz announced a new distribution agreement with HSBC Holdings, along with a deal to acquire HSBC Life Singapore.
Allianz, a Munich, Germany-based insurer and asset manager, said the two agreements will have a combined consideration totalling EUR2.0 billion. Allianz said it expects to generate a double-digit return on investment in the mid-term.
The acquisition of HSBC Life Singapore, a diversified life and health insurance business, is subject to regulatory approvals but expected to close in the first half of 2027.
By Eric Cunha, Alliance News news editor
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