14th Jul 2025 08:43
(Alliance News) - Stock prices in Europe opened largely on the back foot, with the FTSE 100 outperforming, with more tariff reveals over the weekend hurting sentiment on Monday.
President Donald Trump on Saturday said major US trading partners Mexico and the EU would face a 30% tariff starting next month, ramping up pressure for deals in his trade wars.
Both sets of duties would take effect August 1, Trump said in separate letters posted to his Truth Social platform, citing Mexico's role in illicit drugs flowing into the US and a trade imbalance with the EU respectively.
The FTSE 100 index rose 14.54 points, 0.2%, to 8,955.66. The FTSE 250 was down 29.35 points, 0.1%, at 21,583.90, and the AIM All-Share was up just 0.86 of a point, 0.1%, at 774.41.
The Cboe UK 100 was up 0.3% at 893.70, the Cboe UK 250 fell 0.1% to 19,046.34, while the Cboe Small Companies added 0.2% to 17,424.98.
Supporting the FTSE 100 on Monday were miners, drug makers and utilities. Glencore and Rio Tinto rose each 1.3%, AstraZeneca added 1.8%, while United Utilities traded 0.6% higher. Mining shares had a boost from consensus-beating China export data. China is a major buyer of minerals.
The uncertain mood on Monday lifted gold prices, boosting Fresnillo 2.6%. Gold rose to USD3,369.51 an ounce early Monday, from USD3,364.33 at the time of the London equities close on Friday.
In European equities on Monday, the CAC 40 in Paris fell 0.8%, while the DAX 40 in Frankfurt gave back 0.8%.
The pound fell to USD1.3478 early Monday, from USD1.3503 at the time of the London equities close on Friday. The euro faded to USD1.1676 from USD1.1699. Against the yen, the dollar edged down to JPY147.29 from JPY147.34.
The yield on the US 10-year Treasury was quoted at 4.42% early Monday, stretching from 4.41% at the time of the European equities close on Friday. The yield on the US 30-year Treasury was quoted at 4.97%, widening from 4.93%.
"EU got mail," Berenberg analyst Salomon Fiedler commented. "The erratic back-and-forth of US trade policy since Donald Trump returned to the White House on 20 January continues. On Saturday, Trump sent a letter to the EU threatening a baseline tariff rate of 30% from 1 August, plus add-ons if the EU were to retaliate and further potentially higher sector-specific tariffs. While the negotiations between the EU and the US are still ongoing and Trump has come out with extreme positions multiple times before reversing them later, this new threat is worse than we expected. It adds to the risk of a bad outcome (for both sides).
"While we still think that a 10% tariff rate is the most likely final outcome, the risks are now strongly skewed towards higher rates."
In Paris, luxury retail and automotive firms were among those to decline. Hermes International was down 2.1%, Kering shed 1.5% and LVMH gave back 1.3%. Stellantis was 1.6% lower. In Frankfurt, Daimler Truck was 2.3% lower, while sportswear firm Adidas lost 1.9%.
In Asia, Tokyo's Nikkei 225 ended down 0.3%. In China, the Shanghai Composite rose 0.3%, while the Hang Seng Index was 0.4% higher. The S&P/ASX 200 fell 0.1%.
In New York on Friday, the Dow Jones Industrial Average fell 0.6%, the S&P 500 down 0.3% and the Nasdaq Composite 0.2% lower.
The first batch of quarterly earnings from major US stocks land this week, with big banks among those reporting on Tuesday.
"On the start of Q2 earnings, JPMorgan, Wells Fargo and Citi kick off the Q2 earnings season tomorrow. Bank of America, Morgan Stanley and Goldman Sachs will follow on Wednesday. Blackrock, American Express and Charles Schwab will also be among financials reporting. Investors will also focus on messages from results of semiconductor firms ASML (Wednesday) and TSMC (Thursday)," analysts at Deutsche Bank commented.
"Other S&P 500 companies reporting this week will include Johnson & Johnson, Netflix, General Electric and PepsiCo. In Europe, notable names include Novartis, Volvo, Sandvik and Saab."
Elsewhere, the week picks up with US inflation figures on Tuesday.
"It is also an important week for the UK. The chancellor will present her policy update at Mansion House on Tuesday, followed by [Bank of England Governor Andrew Bailey], who'll offer a monetary slant. That's followed by Wednesday's CPI and Thursday's labour market reports. Both are key inputs for the BoE. A further deterioration in labour market activity would be a more important signal than volatility on the inflation side given the recent softening of employment indicators," analysts at Lloyds Bank commented.
A barrel of Brent was higher at USD70.64 on Monday morning, from USD70.38 at the time of the London equities close on Friday.
Back in London, Filtronic shares rose 2.1%. It announced a new contract award to supply high-performance modules for an electronic sensor system for GBP13.4 million.
"The contract is awarded for the complex manufacture and testing of critical components. Delivery is expected to commence in the middle of calendar year 2026, with the modules being built and tested at Filtronic's new secure and highly automated hybrid microelectronics facility in Sedgefield, County Durham," the maker of advanced micro electronics said.
By Eric Cunha, Alliance News news editor
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