9th Jul 2025 08:56
(Alliance News) - Stock prices in Europe opened in the green on Wednesday, shaking off a more stern tone from US President Donald Trump on trade policy, though the threat of sector tariffs on copper and pharmaceuticals hit miners and drug makers.
The FTSE 100 index edged up 7.13 points, 0.1%, to 8,861.31. The FTSE 250 was up just 5.41 points at 21,587.09, and the AIM All-Share was down 2.67 points, 0.3%, at 772.83.
The Cboe UK 100 was up 0.2% at 884.08, the Cboe UK 250 fell 0.1% at 19,088.54, and the Cboe Small Companies gave back 0.2% to 17,560.76.
In European equities on Wednesday, the CAC 40 in Paris rose 0.4%, while the DAX 40 in Frankfurt rose 0.3%.
The pound rose to USD1.3597 early Wednesday, from USD1.3574 at the time of the London equities close on Tuesday. The euro perked up to USD1.1717 from USD1.1709 while against the yen, the dollar fell slightly to JPY146.76 from JPY146.82.
President Trump said Tuesday that he would not extend an August 1 deadline for higher US tariffs to take effect on dozens of economies, while announcing plans for a 50% duty on copper imports.
"That's a shift in tone from Trump's own comments on Monday evening, as Trump had said that the August 1 date was "not 100% firm", and investors had been hopeful that ongoing negotiations and trade deals could avoid that. So it's a clear hardening up of the rhetoric," analysts at Deutsche Bank commented.
"In addition, the president took a more hawkish tone, indicating that some countries would be seeing a 60% or 70% tariff rate and that sectoral tariffs are coming."
Trump also said Washington would soon make an announcement on pharmaceuticals, but officials would allow manufacturers time to relocate their operations into the country.
"We're going to give people about a year, a year and a half to come in, and after that, they're going to be tariffed," he said. "They're going to be tariffed at a very, very high rate, like 200%."
Apart from copper and pharmaceuticals, Trump has ordered probes into imports of lumber, semiconductors and critical minerals that could lead to further levies.
In London, copper miner Antofagasta shares fell 3.0%, while drug makers GSK lost 0.5% and AstraZeneca 0.8%. Elsewhere in Europe, Nordisk fell 1.3% in Copenhagen early on Wednesday, while Novartis was down 0.3% in Zurich.
"Copper first month futures on the NY exchange hit an all-time high in response, as prices rose 13.25% (17% intraday), which was the largest daily move since on record going back to 1988," Deutsche added.
The yield on the US 10-year Treasury was quoted at 4.40% early Wednesday, slimming from 4.42%, where it stood at the time of the London equities close on Tuesday. The yield on the US 30-year Treasury was quoted at 4.93%, easing from 4.96%.
In Asia on Wednesday, the Nikkei 225 in Tokyo ended 0.3% higher. The Shanghai Composite fell 0.1%, turning red in afternoon dealings in China, while the Hang Seng Index in Hong Kong was down 1.2% in late trade. The S&P/ASX 200 in Sydney fell 0.6%.
A barrel of Brent faded to USD69.72 early Wednesday, from USD69.87 late Tuesday afternoon. Gold fell to USD3,292.40 an ounce from USD3,297.61.
Back in London, tobacco firms Imperial Brands and BAT added 1.7% and 2.5%. Jefferies started the pair at 'buy'.
WPP slumped 14% as the advertising firm cut guidance following a tricky first half. WPP now expects a 2025 like-for-like revenue decline, excluding pass through costs, between 3% and 5%. It predicts a decline in headline operating profit margin of 50 to 175 basis points, excluding foreign exchange.
It also sees "continued macro uncertainty weighing on client spend" going forward.
Close Brothers fell 7.7% as it announced it is "proactively shaping" its premium finance business.
"Focusing on commercial lines will enable us to invest in growth and strengthen our position in the market, while streamlining operations and reducing complexity. To support this strategic repositioning, we will optimise the cost base across the whole Premium Finance business through modernisation of our technology platforms, digitising more of the onboarding journey and streamlining our operating model," Close Brothers said.
The bank, broker and asset manager expects "a steady state cost reduction" of around GBP20 million per year by 2030, with GBP15 million in total costs to deliver the savings.
"As a result of this decision, we will withdraw from certain broker relationships over the next six to 12 months. These brokers predominantly offer personal lines, without a material commercial lines focus, and represent a modest portion of our broker network," it added.
Panmure Liberum analysts commented: "It remains the case that the outcome of the Supreme Court process with respect to motor finance remains the most important, and potentially binary, outcome for the company but this is a reminder that even should the Supreme Court outcome be 'positive' there are still issues to address."
Hunting jumped 12% after the supplier to the oil and gas industry reported "good" growth in the first half, backed guidance and announce a buyback.
It expects to report earnings before interest, tax, depreciation, and amortisation between USD68 million to USD70 million for the first half of 2025, growth of around 16% on-year.
For the full-year, it still expects an Ebitda between USD135 million and USD145 million.
Hunting targets a dividend hike of 10% to 13% and announced a share buyback programme of up to USD40 million to kick off after its half-year results are published on August 28.
Elsewhere in London, Jet2 fell 6.4%. The low-cost airline released stronger annual results, though it decided against offering guidance for the new year amid a "late booking profile which limits forward visibility".
"Bookings for summer 2025 continue to be made closer to departure, as previously announced, but it is clear that customers' eagerness to get away from it all and enjoy a relaxing overseas holiday in the sun remains strong, provided pricing is attractive," Jet2 said.
"With the peak summer months of July, August and September not yet complete, plus the majority of Winter 2025/2026 seat capacity of 5.8 million still to sell, it remains premature, as is always the case at this time of year, to provide definitive guidance as to group profitability for the financial year ending 31 March 2026."
By Eric Cunha, Alliance News news editor
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