2nd Apr 2025 08:40
(Alliance News) - European equities traded lower on Wednesday morning, as investors look ahead to what US President Donald Trump's tariff announcements bring.
The FTSE 100 index was down 19.94 points, 0.2%, at 8,614.86. The FTSE 250 lost 24.12 points, 0.1%, at 19,566.74, and the AIM All-Share slipped just 0.31 of a point at 688.07.
The Cboe UK 100 fell 0.2% at 859.17, the Cboe UK 250 shed 0.2% also to 17,037.28, while the Cboe Small Companies was flat at 15,216.50.
The CAC 40 in Paris fell 0.6%, while the DAX 40 in Frankfurt was 0.4% lower.
Against the dollar, the pound fell to USD1.2906 early Wednesday from USD1.2920 at the time of the London equities close on Tuesday, The euro declined to USD1.0783 from USD1.0826. Against the yen, the dollar bought JPY149.68, rising from JPY149.33.
In New York on Tuesday, the Dow Jones Industrial Average ended slightly lower. The S&P 500 added 0.4%, while the Nasdaq Composite rose 0.9% to snap a four-day losing streak.
In Tokyo on Wednesday, the Nikkei 225 rose 0.3%. Sydney's S&P/ASX 200 added 0.1%. In China, the Shanghai Composite was up 0.1% in afternoon trade, but the Hang Seng Index was down slightly.
Trump kept the world's leading economies on edge Tuesday as he made final preparations for a "liberation day" announcement of sweeping new tariffs that could trigger a global trade war.
Trump has promised to be "very kind" when he unveils the so-called reciprocal tariffs on Wednesday, but uncertainty reigned over which countries would be targeted and by how much.
His plan has prompted vows of retaliation from major economies including the EU on Canada and fears that it could unleash a recession at home and abroad.
"Uncertainty reigns ahead of President Trump's announcements today on trade policy. Press reports suggest a number of options are still being discussed for the calibration of import tariffs, both in terms of breadth and the applicable rates. An address from the President in the Rose Garden at the White House is expected at 2100 BST, leaving market participants with another session to ponder the details," Lloyds Bank analysts commented.
"In reality, those hoping for the ambiguity to be resolved fully with today's announcements should brace for disappointment. As a hint of this, Trump's press secretary said he is 'always up for a good negotiation', indicating the potential for a series of bilateral engagements to barter rates down over the coming days, weeks and probably months. Expectations and markets have shifted more recently to the view of a broad-based set of tariffs, leaving open the possibility of a risk-on relief rally if the bark turns out to be worse than the bite. However, in that scenario such a boost in sentiment could also turn out to be short-lived given the prospect of residual uncertainty and drama."
In London, Bakkavor shares rose 7.9%, while Greencore slipped 0.8%.
Greencore said it has reached an "agreement in principle" for a takeover of Bakkavor. Under the terms of the possible offer, the convenience food maker will pay 85 pence in cash and 0.604 of a Greencore share per Bakkavor share. In addition, Bakkavor shareholders would have retained the right to a final dividend of 4.8p per share.
Exclusive of the final dividend, it implies a value of 200p per share in fresh food maker Bakkavor, and valuing the issued and to be issued share capital as a whole at around GBP1.2 billion. Greencore said Bakkavor "would be minded to unanimously recommend" the deal to shareholders.
"Greencore shareholders would own approximately 56% and Bakkavor shareholders would own approximately 44% of the combined group," Greencore said. "In addition, Bakkavor shareholders will receive a contingent value right such that should there be a disposal of Bakkavor's US business, Bakkavor shareholders would be entitled to potential additional value if signing of a US disposal occurs no later than 30 June 2026 or a US disposal completes within 12 months of completion of the possible offer."
Greencore in March confirmed it had made two takeover approaches to Bakkavor. The first proposal was made on February 25, then rejected by the Bakkavor board on February 27. The second proposal was for 85p in cash and 0.523 of a Greencore share. Inclusive of the final dividend, it implied a 189p valuation per Bakkavor share, GBP1.14 billion overall.
Greencore said a tie-up would create a firm with combined revenue of GBP4 billion. Greencore has until April 11 to announce whether it will make a firm offer for Bakkavor.
Raspberry Pi added 8.1%, as the low-cost computing firm reported a decline in annual earnings but expects a "steady build-up in demand".
Pretax profit in 2024 fell 57% to USD16.3 million from USD38.2 million in 2023. Revenue declined 2.4% to USD259.5 million from USD265.8 million. It did not pay a dividend, with the medium-term expectation being that "cash generated will be reinvested into the business".
The firm said: "With channel inventory now normalised, Raspberry Pi anticipates a steady build-up in demand throughout the year, positioning us strongly despite ongoing macroeconomic and geopolitical uncertainties. The projected pace of market recovery, coupled with the timing of embedded design wins, strengthens confidence in solid and sustainable sales growth in full-year 2025."
Elsewhere in London, Topps Tiles fell 5.9%. The tile seller said sales in the first half ended March 29 rose 4.0% on-year to GBP127.7 million.
"While trading through January was slower, volumes began to build progressively thereafter, with this improving trend culminating in a strong performance in March, when the group's underlying sales (excluding CTD) increased by a high single digit percentage compared to the previous year," it explained.
However, it said the "external cost environment remains challenging". Hikes to the UK national living wage and national insurance will "collectively increase the group's cost base" by around GBP4 million on annualised basis.
"As announced in the 2024 results, the timing of holiday pay accruals (exacerbated by the later Easter year on year), seasonally higher energy usage in the first half, investments in strategic growth and the timing of the sales recovery will result in the group's profits in 2025 being weighted significantly towards the second half of the financial year," Topps Tiles added.
Brighton Pier slumped 50% as it announced a plan to exit AIM, following a probe into the benefits and drawbacks of a listing on London's junior market.
The leisure and entertainment business is holding a general meeting on April 22 which will see shareholders vote on the proposal. Should it be passed, its final day of dealings on AIM will be May 1.
A barrel of Brent fell to USD74.20 early Wednesday from USD74.74 late Tuesday. Gold faded to USD3,117.82 an ounce from USD3,126.52.
Wednesday's economic calendar has the latest ADP US jobs report at 1315 BST, before Friday's nonfarm payroll data.
By Eric Cunha, Alliance News news editor
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GreencoreBakkavorRaspberry PiTopps TilesBrighton Pier