19th Feb 2025 12:11
(Alliance News) - Stock prices in Europe were lower on Wednesday afternoon, in cautious trade, as tariff worries continue to hang over equities.
The FTSE 100 index fell 36.70 points, 0.4%, at 8,730.03. The FTSE 250 fell 151.06 points, 0.7%, at 20,730.50, and the AIM All-Share lost 4.77 points, 0.7%, at 719.75.
The Cboe UK 100 fell 0.5% to 875.92, the Cboe UK 250 dropped 0.9% to 18,061.63, and the Cboe Small Companies fell 0.1% to 15,998.57.
In Paris, the CAC 40 was down 0.9%. Frankfurt's DAX 40 lost 0.8%, fading after outperforming in morning dealings.
US President Donald Trump expanded his offensive against trading partners, threatening 25% tariffs on imported cars, and similar or higher duties on pharmaceuticals and semiconductors.
In Frankfurt, shares in carmaker Volkswagen fell 2.2%, while Mercedes lost 2.0%. Stellantis declined 1.6% in Paris.
Sterling traded at USD1.2583 on Wednesday afternoon UK time, down from USD1.2616 at the time of the London equities close on Tuesday. The euro was lower at USD1.0423 from USD1.0462. Against the yen, the dollar was up at JPY151.93 from JPY151.71.
According to the Office for National Statistics, the pace of yearly consumer price inflation picked up to 3.0% in January, from 2.5% in December. The reading topped the FXStreet cited consensus of 2.8%.
It was the sharpest annual consumer price rise since March 2024's 3.2% increase. In January 2024, the inflation rate was 4.0%.
Annual core consumer price inflation picked to 3.7% in January from 3.2% in December. The measure excludes energy, food, alcohol and tobacco.
Service price inflation accelerated to 5.0% from 4.4%.
Consumer prices fell 0.1% in January from December. They had risen 0.3% monthly in December. The latest reading topped the FXStreet cited consensus, as a chunkier 0.3% price fall was forecast.
Following the data, analysts at Barclays said: "We continue to see a March bank rate hold, with cuts resuming from May."
Barclays noted the service price inflation reading was below a 5.2% Bank of England forecast, however.
"The softer-than-expected services print, and progress on underlying services metrics, should mean that the broader view of a gradual disinflationary process from here is little changed. We continue to expect a resumption of cuts from May onwards when data outturns should give the MPC sufficient confidence to shift to sequential easing, in our view. Our call remains for four 25bp rate reductions this year (in May, June, August and September) for a terminal bank rate of 3.5%," Barclays analysts commented.
The next Bank of England decision is on March 20.
Stocks that could be hurt by robust interest rates traded lower. Housebuilder Barratt Redrow fell 3.0% in London, retailer JD Sports declined 2.2% as higher for longer rates could keep a lid on consumer spend, while DIY products seller Kingfisher shed 2.6%.
Antofagasta climbed 3.5% as JPMorgan raised the miner to 'overweight' from 'underweight'. Anto was the best FTSE 100 performer, but Glencore, another miner, was the worst.
Glencore said it may consider transferring its primary listing out of London if it becomes clear that another venue would be a "better one".
Speaking at a post-earnings call, Chief Executive Gary Nagle said the miner and commodity trader "ultimately" wants to ensure its shares are traded at the "right exchange".
Glencore earlier Wednesday had reported a swing to an annual loss as cost of goods sold increased faster than revenue growth.
The Baar, Switzerland-based firm, however, hailed a "strong" 2024, and it announced a "top-up" share buyback of USD1.0 billion, as well as a cash distribution of around USD1.2 billion.
Glencore shares fell 7.7%.
Travel stocks traded lower, after a trading statement from Jet2 perturbed investors. Jet2 was down 11% on AIM. Budget carrier easyJet was among the worst large-cap performers, down 4.3%.
A barrel of Brent rose to USD76.45 early Wednesday afternoon from USD75.66 at the time of the London equities close on Tuesday. Gold rose to USD2,941.41 an ounce from USD2,928.05.
The precious metal spiked to a record high above USD2,946 earlier Wednesday.
Stocks in New York are called to open lower. The Dow Jones Industrial Average is called down 0.2%, and the S&P 500 and Nasdaq Composite 0.1% lower.
Minutes from the Federal Reserve's most recent meeting are released at 1900 GMT on Wednesday. At the meeting in January, the US central bank left rates unmoved at 4.25%-4.50%.
"Today sees the Federal Reserve step up to provide the minutes for their January meeting that saw the bank opt to keep rates steady at 4.50%. While traders will undoubtedly pick through the comments with a fine toothcomb, the huge uncertainty faced by the FOMC under a Trump Presidency means that they are likely to remain highly data dependant. The bank has already eased by 100-basis points, and with the US economy holding up well, it makes sense for them to await the implementation and outcome of Trump's economic plans before taking view on the direction of travel for growth and inflation," Scope Markets analyst Joshua Mahony commented.
By Eric Cunha, Alliance News news editor
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