8th Jul 2025 12:06
(Alliance News) - European equities traded largely higher heading into Tuesday afternoon, with a tariff implementation delay supporting shares, but uncertainty over the future of US trade policy keeping a lid on the enthusiasm.
"While new levies were announced for 14 trading partners, news of a pause until 1 August to allow for further negotiations was received positively. This removes the immediate cliff edge created by a 9 July deadline and US president Trump has indicated that even this new date is not set in stone," AJ Bell analyst Dan Coatsworth commented.
The FTSE 100 index rose 17.61 points, 0.2%, to 8,824.14. The FTSE 250 was up just 7.48 points at 21,545.96, and the AIM All-Share was up 3.41 points, 0,4%, at 775.37.
The Cboe UK 100 was up 0.2% at 879.93. The Cboe UK 250 was also up 0.2% at 19,063.73, and the Cboe Small Companies added 0.1% to 17,527.56.
In European equities on Tuesday, the CAC 40 in Paris fell 0.1%, while the DAX 40 in Frankfurt rose 0.4%.
The pound traded at USD1.3581 on Tuesday afternoon, down from USD1.3641 at the time of the London equities close on Monday. The euro slipped to USD1.1726 from USD1.1735. Against the yen, the dollar rose to JPY146.34 from JPY145.86.
The yield on the US 10-year Treasury was quoted at 4.41% early Tuesday afternoon UK time, widening from 4.39%, where it stood at the time of the London equities close on Monday. The yield on the US 30-year Treasury was quoted at 4.95%, stretching from 4.92%.
The Dow Jones Industrial Average is called down 0.1%, the S&P 500 is called to open slightly higher, and the Nasdaq Composite up 0.2%.
"This week was all about Wednesday's reciprocal tariff deadline in the US. Except, Donald Trump has now kicked the can down the road to August 1st. This means that countries who have yet to secure a deal, or a letter, will have three weeks for more negotiations. The president may have hit Japan, South Korea and other trade allies with tough tariff rates on Monday, but even these aren't set in stone, and the market reaction on Tuesday reflects this," XTB analyst Kathleen Brooks commented.
"This suggests that we are not repeating the sharp sell off and spike in volatility that we saw in April. After falling sharply on Monday, US equity futures are also pointing to a higher open later today, and the Vix is stable and below the average rate for the last 12 months."
Politico reported that the US has offered the EU a deal that will keep a 10% baseline tariffs on all goods, with the exception of some sectors such as aircraft and spirits.
Berenberg analyst Holger Schmieding commented: "The EU is reportedly rushing to conclude a deal with the US, possibly by the end of this week already. Amid media reports about significant progress in these talks, major stumbling blocks remain. The EU seems to have grudgingly accepted that the current 10% US base tariff in addition to some sectoral tariffs cannot be negotiated away. The EU still hopes to get some limited exemptions from these tariffs, for example for aircraft and aircraft parts, so that the overall rise in the average US tariff on imports from the EU this year will be below 10 percentage points. The US is so far threatening to impose higher tariffs than that.
"Unsurprisingly, the negotiations are apparently complicated by some internal disagreements within the EU. Countries with a high exposure to the US goods market such as Germany and most countries to the north and east of Germany favour a softer line to conclude a deal fast whereas France and other countries mostly in southern Europe favour a harder line, including a threat to retaliate significantly against the extra US tariffs. Of course, some internal disagreements are par for the course, within the US administration as much as within the EU."
In London, Entain was the best FTSE 100 performer, rising 3.4% after Bank of America lifted the stock to 'buy'. Former FTSE 100 listing Flutter climbed 1.4% after Jefferies resumed the gambling firm at 'buy'.
Miners traded higher, with Glencore among the best of the lot, up 2.5%.
Rio Tinto advanced 0.6%. The miner is looking for a new chief executive who will improve productivity and cut costs while also being open to transformative mergers and acquisitions, Reuters reported on Tuesday.
Rio back in May said Jakob Stausholm will step down as chief executive "later this year". Stausholm joined Rio in 2018 as chief financial officer and became CEO at the start of 2021. He continues to lead the London-based miner while a successor is found.
Chair Dominic Barton is leading the search. CEO contenders will present to the Rio board this week, Reuters said, citing two sources. An announcement of a new CEO could come as soon as this month, one source said.
Barton wants a CEO who will sharpen productivity and cut costs and be open to transformative M&A deals, Reuters said, citing "two people aware of the chair's priorities".
Rio Tinto is among the FTSE 100's largest constituents. Among the other index powerhouses to trade higher were lender HSBC, up 0.9%, and oil major Shell, 0.8% higher after a 2.9% decline on Monday.
Begbies Traynor added 8.1%. It reported growth in annual earnings and the professional services consultancy said "activity levels are encouraging".
The Manchester, England-based insolvency advisor said in the financial year ended April 30, pretax profit roughly doubled to GBP11.5 million from GBP5.8 million. Revenue rose 12% to GBP153.7 million from GBP136.7 million,
Executive Chair Ric Traynor said: "Looking forward, activity levels are encouraging with positive momentum across the group. We have increased the scale of our teams and market conditions are supportive. We currently expect revenue will be at the upper end of the range of market expectations, with a further year of profit growth in line with expectations, as we continue to invest in growing the business."
Begbies lifted its final dividend by 7.4% to 2.9 pence per share from 2.7p. Its total dividend was 7.5% higher at 4.3p from 4.0p.
A barrel of Brent rose to USD69.09 early Tuesday afternoon, from USD68.84 late Monday afternoon. Gold traded at USD3,325.55 an ounce, up from USD3,320.60.
UK public finances were back in focus on Tuesday. The UK's public finances are in a "relatively vulnerable position" amid pressure from recent U-turns on planned spending cuts, the UK's official forecaster has warned.
The Office for Budget Responsibility said the state finances were facing "mounting risks" but that recent governments have had only limited success in improving the fiscal outlook.
UK public sector debt stood at 96.4% of GDP, gross domestic product, in May, according to latest figures from the Office for National Statistics, ONS.
The OBR said its annual fiscal risks and sustainability report that debt is projected to be "above 270% of GDP by the early 2070s".
The yield on the 10-year gilt stood at 4.64%, stretching from 4.58% late Monday.
By Eric Cunha, Alliance News news editor
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