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LONDON MARKET OPEN: Europe makes slow start on tariff nerves

11th Jul 2025 08:56

(Alliance News) - Stock prices in Europe were lower early Friday, with the FTSE 100 suffering a marginal fall after achieving another record high.

"Donald Trump is rattling sabres in his trade war again, causing more nervousness to creep into sentiment," Hargreaves Lansdown analyst Susannah Streeter commented.

The pound, meanwhile, struggled after a weak UK gross domestic product reading.

The FTSE 100 index edged down just 1.67 points to 8,973.99, but not after hitting a new record high od 8,984.14 shortly after the opening bell. The FTSE 250 was down 65.58 points, 0.3%, at 21,629.12, and the AIM All-Share was up just 0.25 of a point at 773.38.

The Cboe UK 100 was down 0.1% at 895.04, the Cboe UK 250 fell 0.2% to 19,124.05, but the Cboe Small Companies gave back 0.5% to 17,416.59.

In European equities on Friday, the CAC 40 in Paris fell 0.5%, while the DAX 40 in Frankfurt gave back 0.6%.

The pound traded at USD1.3554 early Friday, down from USD1.3561 at the London equities close on Thursday. The euro rose to USD1.1693 from USD1.1679. Against the yen, the dollar advanced to JPY146.79 from JPY146.49.

The UK economy suffered another decline in May, falling well-short of expectations of growth, numbers son Friday showed.

According to the Office for National Statistics, UK gross domestic product fell 0.1% on-month in May. It followed a 0.3% fall in April from March.

The economy had been expected to grow 0.1% in May, however, according to consensus cited by FXStreet.

In March, the economy had risen 0.4% from February.

Services output returned to growth in May, edging up 0.1%, after a 0.3% fall in April. Production output, however, fell at a faster pace of 0.9% in May, after a 0.6% decline in April from March. Construction output was 0.6% lower monthly in May, after a 0.8% rise in April.

"The UK GDP figures have been incredibly volatile this year, and May's decline looks more like noise than signal. But there are growing concerns about the UK economy, driven by weakness in the jobs market. If next Thursday's payroll figures are bad, then it would pile the pressure on the Bank of England to speed up rate cuts," analysts at ING commented.

"For the Treasury, a jobs market that is deteriorating more quickly would – if confirmed – make life yet more difficult in the autumn. Tax rises already look fairly inevitable, and the option of a second round of hikes in employer taxation looks challenging in the current hiring environment."

The yield on the US 10-year Treasury was unchanged at 4.37%. The yield on the 30-year widened slightly to 4.89% from 4.88%.

In New York on Thursday, the Dow Jones Industrial Average rose 0.4%, the S&P 500 added 0.3% and the Nasdaq Composite rose 0.1%.

Canada will face a 35% tariff on exports to the US starting August 1, President Donald Trump said Thursday in a letter to Prime Minister Mark Carney.

It was the latest of more than 20 such letters issued by Trump since Monday, as he continues to pursue his trade war threats against dozens of economies.

XTB analyst Kathleen Brooks commented: "He touted the possibility of raising the tariff rate for all other countries who do not have a trade agreement in place, to 15% or 20%. We have still not heard what tariff rate the EU has agreed, so the chances are it could be set between these levels."

In Tokyo, the Nikkei 225 ended 0.2% lower. In China, the Shanghai Composite ended slightly higher, while the Hang Seng Index in Hong Kong was up 0.7%. In Sydney, the S&P/ASX 200 ended down 0.1%.

A barrel of Brent was flat at USD68.90 early Friday, from USD68.89 at the time of the London equities close on Thursday. Gold rose to USD3,335.74 an ounce from USD3,320.06.

BP shares advanced 2.4%. It guided a pick-up in upstream output in the second quarter, but also expects results to be hit by weaker commodity prices and impairments.

The London-based oil major said it now expects upstream production for the second quarter that ended June 30 to be higher against the first quarter, an improvement on its prior estimate for production to be broadly flat.

In the gas & low carbon energy offering, realisations are expected to contribute a USD100 million to USD300 million hit, when compared to the first quarter, however.

In oil production & operations, a chunkier hit in the range of USD600 million to USD800 million has been earmarked. The company noted "production mix effects and the price lags on BP's production in the Gulf of America and the UAE".

Within the customers & products segment, BP anticipates "seasonally higher" volumes plus stronger fuels margins in customers, and stronger realised refining margins around USD300 million to USD500 million in products.

"There was a significantly higher level of turnaround activity" in its products segment, the company noted. "The oil trading result is expected to be strong."

BP noted the Brent crude oil price averaged USD67.88 a barrel during the second quarter, down from USD75.73 in the first. BP also warned of post-tax asset impairments in the range of USD500 million to USD1.5 billion "attributable across the segments".

SSP was the worst mid-cap performer, the Upper Crust owner sinking 5.5% after UBS cut its recommendation to 'sell' from 'neutral'.

On AIM, accesso Technology plunged 27%. The provider of software for the leisure, entertainment and cultural sectors expects revenue at the lower end of guidance.

In the first half, it was hurt by "softer than expected attendance across our customer portfolio".

"Our own performance held up well, but customer dynamics at key venues limited volumes and therefore reduced the transaction pool from which we drive a large share of our revenue. Importantly, the seasonality in our business means that June, July and August are our most important trading months. With two thirds of this critical summer period ahead of us, we remain laser-focused on delivery," it said.

"At this stage, and subject to trading over the coming weeks, we expect to deliver full-year revenue at the lower end of our anticipated guidance range."

By Eric Cunha, Alliance News news editor

Comments and questions to [email protected]

Copyright 2025 Alliance News Ltd. All Rights Reserved.


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