3rd Feb 2025 12:10
(Alliance News) - Stock prices in Europe were sharply lower midday Monday, as US President Donald Trump imposed tariffs on neighbouring nations and China, and threatened trade curbs on the EU too.
The FTSE 100 index fell 109.23 points, 1.3%, at 8,564.73. The FTSE 250 shed 404.91 points, 1.9%, at 20,545.57. The AIM All-Share fell 7.52 point, 1.1%, at 710.61.
The Cboe UK 100 was down 1.3% at 858.57, the Cboe UK 250 was down 1.9% at 17,978.12, and the Cboe Small Companies plunged 2.5% at 15,535.46.
Frankfurt's DAX 40 and the CAC 40 in Paris fell 1.7%.
The pound slumped to USD1.2321 early Monday afternoon, from USD1.2429 at the London equities close on Friday. The euro tumbled to USD1.0252 from USD1.0393. Against the yen, the dollar fell to JPY154.61 from JPY154.85.
"The losses seen throughout both the FTSE 100 and 250 highlight the perception that this trade war will hurt businesses across the globe irrespective of whether they are directly impacted by tariffs. The consequences for global markets will come down to whether nations respond with a tit for tat levy on US goods rather than striking a deal that would seek to bring an end to this crisis. Nonetheless, today is a brutal reminder for investors that Trump's pro-business approach may not necessarily always translate into market friendly announcements. Volatility is back and it's here to stay," Scope Markets analyst Joshua Mahony commented.
"In the UK, the prospective impact on global trade and economic activity helped drive the miners and banks lower. While we have seen some weakness for energy names, the gains seen for natural gas and oil highlight the potential for investors to seek shelter from inflation fears within this sector. As is often the case, precious metals took a hit in early trade, with gold typically joining the crowd within the inception of any widespread selloff. Nonetheless, the gains we are subsequently seeing does highlight the prospective benefit if global demand continues to favour gold over US treasuries. On mainland Europe, the automotive sector appears to be the hardest-hit, with Volkswagen, BMW, Stellantis, and Mercedes Benz all tumbling on the prospect of Transatlantic sales collapsing."
Miner Antofagasta fell 3.9% in London, banking firm HSBC lost 2.2% while Shell declined 0.7%. BMW lost 3.9% in Frankfurt, Mercedes-Benz declined 4.1% and VW gave back 6.1%. In Paris, Stellantis was down 6.0%.
The looming prospect of a trade war with the US threatens to overshadow Prime Minister Keir Starmer's meeting with EU chiefs after Donald Trump claimed the UK is "out of line".
In comments overnight, the US president suggested he is poised to expand his tariff regime to both the UK and the EU, but added that he thinks a deal can be done with Britain.
Asked by the BBC early on Monday if he will target the UK with tariffs, Trump said: "UK is out of line but I'm sure that one… I think that one can be worked out."
In New York, stocks were called to open lower. The Dow Jones Industrial Average, the S&P 500 and Nasdaq Composite are called to open down 1.3%, 1.5% and 1.7%.
Back in London, Speedy Hire shed 27%. It said annual profit will be lower than expected, as its final quarter has got off to a slow start. In a trading update for the 10 months to January 31, the tools and equipment hire services provider said positive momentum ahead of its fourth-quarter was sapped by "the widely reported economic downturn".
"This has resulted in a slower post December shutdown recovery across the majority of our customer base. Further, the delay in [control period 7] rail works has also had an impact on trading in the final quarter but remains a significant opportunity for the group into FY2026," Speedy Hire said.
CP7 is Network Rail's slate of planned activities for the renewal and mainline railway infrastructure in the UK between April of last year and March 31, 2029.
Speedy Hire added: "During the third quarter we continued to develop our Trade & Retail proposition, securing new major trading relationships, although it is taking longer to achieve the expected levels of hire revenue which we now anticipate achieving during first quarter FY2026. Our joint venture in Kazakhstan has experienced a significant downturn in performance due to the early shutdown of major contracts. We anticipate this having an ongoing impact into FY2026, however, there are significant opportunities which give confidence for future growth."
Speedy Hire said it has a "promising pipeline of growth opportunities with new and existing customers", but the tricky start to the final quarter means it predicts "lower than anticipated profitability for the full year".
Ultimate Products declined 15%. It warned full-year earnings would be lower than expected.
The Manchester, England-based owner of homeware brands including Salter and Beldray now expects adjusted earnings before interest, tax, depreciation and amortisation for the financial year ending July 31 to be between GBP14 million to GBP16 million, below the company compiled market consensus of GBP20.6 million.
In response, shares in Ultimate Products were down 14% to 86.75 pence each in London on Monday morning. Earlier, they set a new 52-week low of 72.12p.
Ultimate Products estimates revenue to be 5.7% lower at GBP79.8 million in the six months that ended January 31 from GBP84.2 million a year prior.
A barrel of Brent rose to USD76.92 early Monday afternoon, from USD75.92 at the time of the London equities close on Friday. Gold faded to USD2,800.63 an ounce from USD2,806.64.
By Eric Cunha, Alliance News news editor
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