4th Mar 2025 11:58
(Alliance News) - Stock prices in London were in the red at midday on Tuesday, as the fallout continues over US tariffs against trading partners and the Trump administration's halt of aid to Ukraine.
"Investors were desperately hoping that Trump would delay tariffs on Canada, Mexico and China at the eleventh hour, yet the US president has stuck to his guns and brought them into power," commented AJ Bell's Russ Mould. "Naturally, the recipients have started to retaliate and that has raised the prospect of a full-blown trade war.
"Investors knew there was a real chance this would happen but quietly hoped it would all go away and simply be Trump having a bark worse than his bite. Not this time around."
The FTSE 100 index was down 38.17 points, 0.4%, at 8,833.14. The FTSE 250 was down 169.51 points, 0.8%, at 20,212.78, and the AIM All-Share was down 7.51 points, 1.1%, at 694.29.
The Cboe UK 100 was down 0.5% at 884.45, the Cboe UK 250 was down 1.0% at 17,532.16, and the Cboe Small Companies was down marginally at 15,551.32.
Airline stocks had a downbeat morning, possibly due to the increased likelihood of the Ukraine conflict continuing.
Wizz Air lost 6.5%, International Consolidated Airlines was down 4.8% and the second-biggest loser on the FTSE 100, easyJet lost 3.1% and in Frankfurt, Ryanair lost 2.2%.
This was despite both Wizz Air and Ryanair saying they carried more passengers last month than in the same month a year ago, while keeping their planes full.
Also, Wizz Air said it is seeing "better than expected revenue trends" for the first quarter of its 2026 financial year.
Intertek continued to lead the FTSE 100, up 6.9%, off the back of its 2024 results. Fresnillo came in second, up 3.6%.
The Mexico-focused precious metals producer said revenue increased 29% to USD3.50 billion last year, reflecting higher silver and gold prices. Pretax profit multiplied to USD743.9 million from USD114.0 million, although higher tax expenses hit the bottom line.
Fresnillo declared a final dividend of 26.1 US cents, bringing the total ordinary payout for the year to 32.5 cents in a significant recovery from just 5.6 cents in 2023.
Ashtead Group remained the worst-performing large-cap, down 5.2% after it reported decreased pretax profit and revenue in the three months to January 31.
"If Ashtead is a barometer for the health of the US economy, its results imply that the country is coming down with a cold," Mould commented, adding: "It is staring into the unknown with major uncertainties over near-term earnings.
"Tariffs create uncertainties over inflation, business sentiment and the economy, and that means Ashtead faces an uphill battle to reenergise earnings growth."
abrdn, which is changing its name to aberdeen group PLC, was high up on the FTSE 250 with an 11% rise. It was just behind best performer Keller, up 12%.
The Edinburgh-based asset manager said it swung to an IFRS pretax profit of GBP251 million in 2024 from a GBP6 million loss in 2023. Assets under management and administration grew by 3.3% to GBP511.4 billion as of December 31.
aberdeen declared a full-year dividend of 14.6 pence per share, unchanged from 2023, and set new targets for 2026 including adjusted operating profit of at least GBP300 million.
Oxford Nanopore was the worst performer, losing 10%.
The Oxford-based specialist in DNA and RNA sequencing technologies reported an 8% increase in 2024 revenue to GBP183.2 million, although pretax loss narrowed slightly to GBP140.0 million.
Looking ahead, the firm expects revenue growth of 20% to 23% in 2025 at constant currency, with a gross margin of around 59%.
On AIM, Westminster Group was 27% higher.
The London-based specialist security and services company has signed a minimum 15 year contract to provide security at four airports in Gabon, expected to generate around USD5.5 million in revenue for the first 12 months.
Westminster has also agreed to issue 100.0 million subscription shares at 1.2p each, raising GBP1.2 million, to Pantheon A Family Office.
Savannah Energy was AIM's biggest loser on its first day back after a trading suspension, dropping 64%.
The Africa-focused energy company announced its completion of a subscription, raising approximately GBP30.6 million total for 437.1 million shares at 7p each.
UK Prime Minister Keir Starmer will not be "blindsided or bounced" from the pursuit of peace in Ukraine, Deputy PM Angela Rayner has insisted, as Europe reels from Donald Trump's decision to pause US military aid to the country.
Following an argument in the Oval Office between Ukrainian President Volodymyr Zelensky and the US leader last Friday, the White House has suspended delivery of ammunition and other equipment to Kyiv, announcing overnight that assistance is being "reviewed" to "ensure that it is contributing to a solution".
Speaking on Tuesday, Angela Rayner said the prime minister remains "laser-focused" on securing a lasting peace for Kyiv and would not be "derailed" in those efforts.
UK Chancellor Rachel Reeves, meanwhile, is to promise to cut red tape to make it easier for the government to buy military equipment.
She will tell a manufacturing industry conference in London later on Tuesday that she wants to "fire up Britain's industrial base" to step up arms production, claiming the issue has been "ducked and dodged" by governments for too long.
Starmer has pledged to increase defence spending to 2.5% of the size of the economy from April 2027, something the chancellor believes will help create jobs and drive growth in the UK.
In European equities on Tuesday, the CAC 40 in Paris was down 1.2%, while the DAX 40 in Frankfurt was down 2.0%.
The EU has warned that US tariffs on Canada and Mexico threaten transatlantic "economic stability" and risk "disrupting global trade," urging Washington to reverse course.
"These tariffs threaten deeply integrated supply chains, investment flows, and economic stability across the Atlantic," said EU trade spokesman Olof Gill. "We call on the US to reconsider its approach and work towards a cooperative, rules-based solution that benefits all parties."
Meanwhile, the seasonally adjusted unemployment rate in the eurozone stood at 6.2% in January 2025, unchanged from December and down from 6.5% in January 2024.
It is slightly lower than the FXStreet-cited consensus of 6.3%, which was the previously reported unemployment rate for December, which was revised to 6.2%.
Across the EU, the unemployment rate also held steady at 5.8% on a monthly basis, compared to 6.1% a year earlier.
Elsewhere, the US decision to suspend delivery of ammunition and other equipment to Kyiv is a "serious setback" towards achieving peace, the Irish premier has said.
Taoiseach Micheal Martin, who is due to meet Trump in Washington DC next week, said on Tuesday: "It's a very serious development, there's no point in saying anything else."
He said there needs to be continued engagement between EU leaders and the US to do everything possible for a peace that protects "Ukrainian sovereignty and its territorial integrity".
And in Germany, negotiations to form the next government have entered a third day.
The centre-right CDU/CSU alliance - made up of the Christian Democrats, CDU, and Soder's Christian Social Union, CSU, - is hoping to form a coalition with outgoing Chancellor Olaf Scholz's Social Democratic Party, SDP, after winning parliamentary elections last month.
This would normally take weeks, if not months, but negotiators are under huge pressure to find an immediate consensus as Europe scrambles to respond to the dramatic shift in US foreign policy under Donald Trump.
EU leaders are set to convene in Brussels on Thursday, with Germany's conservative leader Friedrich Merz - the presumptive next chancellor - hoping for a deal to be reached with the SPD by then.
Under discussion in Berlin are two separate emergency funds - one on defence, and the other on infrastructure - in the three-digit billion range, reportedly modelled on the EUR100 billion pot for the German military that was agreed shortly after the Russian invasion of Ukraine.
The pound was quoted higher at USD1.2725 at midday on Tuesday in London, compared to USD1.2710 at the equities close on Monday. The euro stood at USD1.0520, higher against USD1.0498. Against the yen, the dollar was trading lower at JPY148.44 compared to JPY150.20.
Stocks in New York were called mixed. The Dow Jones Industrial Average was called down 6.00 points, the S&P 500 index down 0.1%, and the Nasdaq Composite up 0.1%.
China meanwhile announced on Tuesday it will impose additional tariffs of up to 15% on imports of major US farm products, including chicken, pork, soy and beef, and also expanded controls on doing business with key US companies.
The tariffs announced by the Commerce Ministry are due to take effect from March 10, though goods already in transit will be exempt until April 12.
They follow US President Donald Trump's order to raise tariffs on imports of Chinese products to 20% across the board.
Also on Tuesday, Beijing placed 10 more US firms on its unreliable entity list, which would bar them from engaging in China-related import or export activities and from making new investments in the country.
Brent oil was quoted lower at USD70.49 a barrel at midday in London on Tuesday from USD72.59 late Monday.
Gold was quoted higher at USD2,918.75 an ounce against USD2,888.92.
Meanwhile in the Middle East, Arab leaders meeting in Egypt are set to approve a counterproposal to US President Donald Trump's call for the Gaza Strip to be depopulated and transformed into a beach destination.
The summit on Tuesday hosted by Egyptian President Abdel-Fattah el-Sissi is expected to include the leaders of regional heavyweights Saudi Arabia and the United Arab Emirates, whose support is seen as crucial for any post-war plan.
Egypt has developed an alternative plan in which Palestinians would be relocated to safe areas inside Gaza while its cities are rebuilt. Hamas would cede power to an interim administration of political independents until a reformed Palestinian Authority can assume control.
Still to come on Tuesday's economic calendar, look out for the US Redbook index read.
By Emma Curzon, Alliance News reporter
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