2nd Apr 2025 11:57
(Alliance News) - European stocks were lower on Wednesday afternoon, as investors moved with trepidation ahead of an announcement on reciprocal US tariffs.
The FTSE 100 index was down 74.44 points, 0.9%, at 8,560.36. The FTSE 250 lost 139.64 points, 0.7%, at 19,451.22, and the AIM All-Share slipped 3.61 points, 0.5%, at 684.77.
The Cboe UK 100 fell 0.8% at 854.21, the Cboe UK 250 shed 0.9% to 16,926.38, but the Cboe Small Companies was up 0.1% at 15,225.95.
The CAC 40 in Paris fell 0.7%, while the DAX 40 in Frankfurt tumbled 1.2%.
The dollar was mixed. Against the greenback, the pound rose to USD1.2932 early Wednesday afternoon from USD1.2920 at the time of the London equities close on Tuesday, The euro declined to USD1.0789 from USD1.0826. Against the yen, the dollar bought JPY149.37, rising slightly from JPY149.33.
Stocks in New York are called to open lower. The Dow Jones Industrial Average is called down 0.4%, the S&P 500 0.5% lower and the Nasdaq Composite down 0.6%.
"European equities are falling in anticipation of today's liberation day tariffs with Donald Trump expected to announce his sweeping tax on imports at 4pm Eastern time. Rather predictably it is the DAX which leads the losses as the German market surge seen in the wake of the agreement to increase the government deficit and ramp up fiscal expenditure fades. For traders and investors, today represents a day of huge uncertainty as we weigh up the potential for retaliatory tariffs and a tit-for-tat trade war," Scope Markets analyst Joshua Mahony commented.
"[US Treasury Secretary] Scott Bessent has stated that today's tariffs are likely to be the worst it will get, and his historical comments over the potential to 'escalate to de-escalate' means that we will hopefully soon move into a phase where we hear more about potential trade deals and tariff reduction rather than the bad news that currently dominates markets. Nonetheless, with the likes of Canada and the EU standing ready to implement retaliatory measures, things might get worse before they get better."
Among those on the decline in London ahead of the tariff announcements are drug makers GSK and AstraZeneca, down 3.1% and 2.3%. Over in Paris, Sanofi was down 2.8% and Bayer shed 3.8% in Frankfurt.
XTB analyst Kathleen Brooks commented: "Pharma exports are expected to get hit hard by Trump's tariffs, and healthcare exports make up one of the biggest categories of exports to the US, along with cars and machinery."
Trump will roll out the measures flanked by cabinet members in the Rose Garden of the White House at 1600 EDT, 2100 BST, – after Wall Street markets close – promising that they will stop America being "ripped off" and will deliver a new "golden age" of US industry.
Prime Minister Keir Starmer has said he expects the UK will be hit, and Chancellor Rachel Reeves warned Cabinet ministers there would be an economic impact from the tariffs.
Economists at the Office for Budget Responsibility have warned that US tariffs could eliminate Reeves's "headroom" against her day-to-day spending plans, requiring her to make more cuts or hike taxes to meet the rules she has set herself.
Back in London, Raspberry Pi added 6.3%.
The provider of "cost‑effective, high‑performance computing" reported a decline in annual earnings, but expects a "steady build-up in demand".
Pretax profit fell 57% to USD16.3 million in 2024 from USD38.2 million in 2023, as revenue declined 2.4% to USD259.5 million from USD265.8 million. The company said channel and end-market demand improved through the final quarter and continued to strengthen.
Chief Executive Officer Eben Upton said: "In the second half we released more products than in any prior full year, despite the potential distraction of the IPO, continuing to excite our enthusiast and embedded communities."
Jefferies lifted Raspberry Pi to 'buy' from 'hold' on Wednesday, in the wake of the results.
Jefferies: "The inventory correction, which was a headwind for Raspberry Pi's 2024 revenues and earnings, has now largely ended. As a result orders are showing a gradual improvement, with additional contribution from new products including the CM5, the RP2350 MCU and AI accessories. We expect the contribution from these products and direct-to-original equipment manufacturer customers to further accelerate into 2026.
"Raspberry Pi has confirmed that the channel inventory correction that impacted its sales in Q2 and H2-24 is now complete. There are still a few small pockets of inventory at OEM customers, but these are also close to being cleared out. OEMs have started increasing orders gradually. At the same time new design wins are also moving into volume, some of it on new products like the CM5. The company has not seen any impact from US tariffs. With most competitors having Asia-based manufacturing especially in China, Raspberry Pi's factory in Wales may even provide a small advantage as long as end-demand in the US holds up."
Brighton Pier slumped 57% as it announced a plan to exit AIM, following a probe into the benefits and drawbacks of a listing on London's junior market.
The leisure and entertainment business is holding a general meeting on April 22 which will see shareholders vote on the proposal. Should it be passed, its final day of dealings on AIM will be May 1.
A barrel of Brent fell to USD74.04 early Wednesday afternoon from USD74.74 late Tuesday. Gold faded to USD3,116.08 an ounce from USD3,126.52.
Wednesday's economic calendar has the latest ADP US jobs report at 1315 BST, before Friday's nonfarm payroll data.
By Eric Cunha, Alliance News news editor
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