9th Apr 2025 11:57
(Alliance News) - London stocks remained in the red at midday on Wednesday, as US tariffs continue to wreak havoc on global markets, and British gilt yields reach their highest point in more than 25 years.
The FTSE 100 index was down 230.18 points, 2.9%, at 7,680.35. The FTSE 250 was down 455.01 points, 2.5%, at 17,894.14, and the AIM All-Share was down 11.80 points, 1.8%, at 629.86.
The Cboe UK 100 was down 2.8% at 765.31, the Cboe UK 250 was down 2.6% at 15,543.89, and the Cboe Small Companies was down 0.8% at 14,548.24.
British long-dated gilt yields surged to their highest point since 1998 on Wednesday.
The yield on a 30-year gilt, or a UK government bond, hit 5.518% on Wednesday morning, up 16 basis points and surpassing a previous 27-year high of 5.472% set in January.
US Treasury yields rose sharply overnight too, which came before the rise in yields in the UK and elsewhere. The sell-off in Treasuries signalled that US assets were temporarily losing their safe-haven status, analysts said.
George Saravelos, global head of foreign exchange research at Deutsche Bank, said that if the turbulence continues, "we see no other option for the Fed but to step in with emergency purchases of US Treasuries to stabilise the bond market".
Stocks in New York were called lower. The Dow Jones Industrial Average was called down 1.0%, the S&P 500 index down 0.7%, and the Nasdaq Composite 0.3% lower.
Gold was quoted higher at USD3,043.71 an ounce at midday on Wednesday, against USD3,009.89 at London's market close on Tuesday.
"Gold's rebound may be attributed to investors repositioning after the shock to the US stock market last week as a result of the ignition of the trade war, which led to widespread liquidation across asset classes. While the trade war news was not new and its escalation was not unexpected, the liquidation that swept through markets last week appears to have forced gold investors to liquidate their positions to cover their other positions or to take profit after record highs," said XS.com analyst Samer Hasn.
"The return of gains for the yellow metal appears to indicate a return to engagement with market fundamentals, which could boost demand for safe haven assets amid dim hopes for a de-escalation of the trade war and the resulting damage from its escalation."
Meanwhile, oil prices plunged Wednesday as US President Donald Trump's tariffs spread, sparking concerns over weak demand, with international benchmark Brent North Sea crude hitting the lowest level in four years.
Brent oil was quoted at USD60.27 a barrel at midday in London on Wednesday from USD63.95 late Tuesday.
Earlier, Brent slumped more than four percent to USD59.77 per barrel before recovering slightly, while main US crude contract, WTI, shed 4.3% to USD57.02.
German political leaders are set to hold a press conference in Berlin on Wednesday to present a coalition agreement, paving the way for a new government.
The conservative CDU/CSU bloc - made up of Friedrich Merz's Christian Democrats and the Bavaria-only Christian Social Union, CSU, - has been negotiating for weeks with the centre-left Social Democratic Party, SPD, over a coalition.
A press conference in the German capital was set for 1500 CEST, 1400 BST.
Merz, the presumptive next chancellor, is expected to appear along with SPD co-leader Lars Klingbeil and Bavarian Premier Markus Soder from the CSU.
In European equities on Wednesday, the CAC 40 in Paris was down 3.0%, while the DAX 40 in Frankfurt was 3.1% lower.
Scope Markets analyst Joshua Mahony commented: "European markets have reversed yesterday’s gains, with the so-called reciprocal tariffs kicking in today. If we thought the figures cooked up by Trump and his team were bad, we now find ourselves facing a trade war with 104% tariffs being places on all Chinese imports. While Trump speculated that China wants to make a deal, we have seen precious few signs that any such conversations are taking place right now.
"Notably, the Hang Seng managed to reverse the entire 3% decline seen in early trade, closing in the green despite the sharp spike in costs for exports into the US. To some this may be an indication that markets have drawn a line under recent declines, with the whopping 13% collapse seen on Monday clearly a pre-emptive move in anticipation of today’s events."
The pound was quoted up at USD1.2827 at midday on Wednesday in London, compared to USD1.2772 at the equities close on Tuesday. The euro also stood higher, at USD1.1032 against USD1.0914.
Against the yen, the dollar was trading lower at JPY145.05 compared to JPY146.95.
China is trying to tariff-proof its economy by boosting consumption and investing in key industries, but analysts say it remains critically vulnerable to the economic storm triggered by Donald Trump's 104% levies on its goods.
Beijing has vowed to "fight to the end" against Trump's aggressive trade policy, with number two leader Li Qiang saying authorities were "fully confident" in the resilience of the Chinese economy.
"The Chinese economy has been significantly weakened since Trump's first term and can't really withstand the impact of sustained high tariffs," said Henry Gao, an expert on the Chinese economy and international trade law.
China and the US can resolve trade and economic disputes through "equal" dialogue, a Beijing white paper shared by state news agency Xinhua said Wednesday.
Ceramics products manufacturer Churchill China was up 17% in London at midday.
Pretax profit fell 21% to GBP8.5 million during 2024 from GBP10.8 million in 2023, as revenue declined 4.9% to GBP78.3 million from GBP82.3 million. The firm declared a final dividend of 26.5 pence per share, bringing the total dividend for 2024 to 38.0p, up 5.6% on-year from 36.0p.
"2024 was a challenging year with market contraction driving lower sales," says Chief Executive Officer David O'Connor. "We continue to address those activities that are within our control. We have accelerated our continuous improvement programme across the factory. Correspondingly, yields have improved and we see further opportunities for significant savings through this programme."
CEO O'Connor added: "We expect to see financial returns from our improvement activities over the coming years as the underlying macro conditions and consumer sentiment improves."
Epwin Group climbed 3.3%.
The manufacturer of energy efficient and low maintenance building products reported pretax profit growth of 61% during 2024 to GBP21.3 million from GBP13.2 million in 2023.
Revenue, on the other hand, declined 6.2% to GBP324.0 million from GBP345.4 million. Cost of sales are down 9.2% to GBP210.1 million from GBP231.4 million, distribution expenses are reduced by 5.0% to GBP39.9 million from GBP42.0 million, and administrative expenses are 11% lower at GBP45.5 million from GBP51.3 million.
Epwin proposed a final dividend of 3.00 pence per share, up 7.1% on-year from 2.80p. This brought the total dividend for the year to 5.10p, up 6.3% from 4.80p.
AstraZeneca was the biggest loser on London's FTSE 100 at midday, down 6.1%.
Daiichi Sankyo and AstraZeneca on Tuesday said Datroway has secured EU approval to treat breast cancer patients. The two firms agreed to jointly develop and commercial Datroway in July 2020.
The treatment has now been approved in the EU to treat adult patients with unresectable or metastatic hormone receptor positive, HER2 negative breast cancer who have received endocrine therapy and at least one line of chemotherapy in the advanced setting.
In trials, Datroway was found to significantly reduce the risk of disease progression or death by 37% compared with chemotherapy. The drug is now approved in more than 30 countries.
Still to come on Wednesday's economic calendar, minutes from the last US Federal Open Market Committee meeting at 19:00 BST.
By Emily Parsons, Alliance News reporter
Comments and questions to [email protected]
Copyright 2025 Alliance News Ltd. All Rights Reserved.
Related Shares:
AstrazenecaEpwin GrpChurchill China