9th May 2025 08:59
(Alliance News) - Stock prices in Europe opened higher on Friday, amid hope that trade tensions between the US and China could soften.
The renewed optimism comes on the back of a US-UK agreement. Talks between US and Chinese officials are due to take place over the weekend.
The focus on trade policy at the end of the week comes after central banks took centre-stage. The Federal Reserve left rates unmoved on Wednesday, before a Bank of England cut with a hawkish twist on Thursday. This supported the pound on Thursday afternoon, but the dollar was back in form on Friday.
The FTSE 100 index rose 45.60 points, 0.5%, at 8,577.21. The FTSE 250 rose 104.49 points, 0.5%, at 20,561.64, and the AIM All-Share added 1.78 points, 0.3% at 722.20.
The Cboe UK 100 was up 0.5% at 854.74, the Cboe UK 250 rose 0.5% also at 17,988.36, and the Cboe Small Companies was down 0.3% at 15,618.03.
In Paris, the CAC 40 rose 0.8%, while the DAX 40 in Frankfurt added 0.6%.
The pound fell to USD1.3257 early Friday, from USD1.3295 at the time of the London equities close on Thursday. The euro faded to USD1.1249 from USD1.1265. Against the yen, the dollar climbed to JPY145.28 from JPY145.15.
US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer are set to meet Chinese Vice Premier He Lifeng in Switzerland on Saturday and Sunday, marking the first talks between the superpowers since Trump unveiled his tariffs.
US President Donald Trump told reporters that he thought the negotiations would be "substantive" and when asked if reducing the levies was a possibility, he said "it could be".
A "historic" UK-US trade deal will save thousands of jobs in the car and steel industries which have been threatened by Donald Trump's tariffs, Prime Minister Keir Starmer said.
The trade agreement was confirmed in a call between the PM and the US president which was broadcast live on both sides of the Atlantic.
US import taxes which had threatened to cripple British high-end carmakers were cut from 27.5% to 10%, while the 25% tariff on steel has also been removed entirely.
The blanket 10% tariff imposed on imports by Trump as part of his sweeping "liberation day" announcement remains in place, but talks are ongoing in a UK effort to ease them.
"UK-US trade deal is symbolic at best: It is the first trade deal agreed after President Trump began his second presidential term in January, and after he imposed strict tariffs on countries around the world in April. It is symbolic for this reason, but we think it reinforces our view that tariffs are unlikely to go away anytime soon. Still, markets are cheering the news. The US dollar is the main beneficiary in the FX space, with GBP/USD erasing its earlier gains to trade closer to USD1.32," Convera analyst George Vessey commented.
In New York, both the Dow Jones Industrial Average and the S&P 500 ended up 0.6% on Thursday. The Nasdaq Composite climbed 1.1%.
In Tokyo, the Nikkei 225 added up 1.6%. In China, the Shanghai Composite fell 0.3%, while the Hang Seng Index in Hong Kong was 0.3% higher. The S&P/ASX 200 added 0.5%.
A barrel of Brent rose to USD63.42 early Friday from USD62.75 late Thursday. Gold faded to USD3,328.48 an ounce from USD3,340.18.
In London, IAG shares rose 0.8%. It said demand on its key North Atlantic routes remains "robust" as it reported higher sales in the first quarter.
The London-based owner of British Airways and Iberia Airlines, IAG, swung to a pretax profit of EUR239 million in the first quarter of 2025 from a loss of EUR87 million a year ago.
Adjusted operating profit jumped to EUR198 million from EUR68 million, beating company compiled consensus of EUR158 million. Strong revenue growth and a lower fuel price offset expected cost increases, IAG said.
Revenue climbed 9.6% on-year to EUR7.04 billion from EUR6.43 billion, beating consensus of EUR6.80 billion.
"We continue to see resilient demand for air travel across all our markets, particularly in the premium cabins and despite the macroeconomic uncertainty," Chief Executive Officer Luis Gallego said.
In addition, IAG announced it is ordering 53 new Airbus and Boeing aircraft for its long-haul fleet.
It will buy 32 Boeing 787-10 aircraft for British Airways and 21 Airbus A330-900neo aircraft, "which can be deployed within Aer Lingus, Iberia or LEVEL".
The aircraft will be delivered between 2028 and 2033, IAG said.
Urban Logistics shares rose 3.7%, while LondonMetric lost 0.1%.
LondonMetric agreed a GBP698.9 million deal to acquire Urban Logistics, as it hailed the warehousing sector as its "strongest conviction call" in the UK real estate market. Each Urban Logistics shareholder is to receive 0.5612 of a new LondonMetric share, and 42.8 pence in cash.
Based on the 191.5p closing price of LondonMetric shares on Thursday, the deal values Urban Logistics shares at 150.3p each, and the entire issued and to be issued ordinary share capital at GBP698.9 million.
"This is an excellent transaction that grows our urban logistics platform and supports our triple net strategy. Urban warehousing remains our strongest conviction call for organic rental growth across the UK real estate market. The portfolio is well located, highly reversionary and our asset management focus will ensure that it delivers reliable, repetitive and growing income-led returns," LondonMetric CEO Andrew Jones said.
"We have a demonstrable track record of successfully executing on M&A and we expect the transaction will deliver substantial synergies, cost savings and accelerated earnings growth. Our scale will continue to deliver enhanced access to capital, more debt optionality, increased share liquidity and larger investment opportunities."
Travis Perkins rose 5.6%, though SIG shed 9.8%. Travis Perkins named SIG's boss Gavin Slark as its next chief executive.
Slark is to join the Northampton-based building supplies firm "no later than" January 1.
Travis Perkins had announced in March that Pete Redfern was leaving the CEO post due to ill health. Redfern became CEO in September of last year.
Slark had an 11-year stint as CEO of Dublin-based building materials and construction products supplier Grafton Group PLC which ended in 2022.
"The board and I are delighted that Gavin has agreed to join us. We are all very much looking forward to working with him. Gavin brings with him unrivalled experience of the sector in addition to a long pedigree as a CEO of significant public companies. Gavin is well placed to continue the work we have started to refocus and change the way we operate in order to better serve our customers and work effectively with our suppliers, as well as engage and motivate our teams," Chair Geoff Drabble said.
SIG, a Sheffield, England-based supplier of insulation and building products, said it has received notice from Slark of his resignation.
"Gavin will continue as SIG's CEO for a transitionary period, until a date no later than 31 December 2025," SIG said, adding that the process to find a new CEO is underway.
By Eric Cunha, Alliance News news editor
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