5th Feb 2025 08:54
(Alliance News) - London's FTSE 100 made a slow start on Wednesday, with trade worries keeping positivity at bay again, while GSK was a standout performer in early trade.
The FTSE 100 index fell 6.52 points, 0.1%, at 8,564.25. The FTSE 250 declined 60.33 points, 0.3%, at 20,592.93. The AIM All-Share fell 0.80 of a point, 0.1%, at 711.57.
The Cboe UK 100 was down 0.1% at 857.77, the Cboe UK 250 fell 0.4% at 18,005.04, and the Cboe Small Companies was down slightly at 15,490.45.
In Frankfurt, the DAX 40 was 0.4% lower, while the CAC 40 lost 0.3%.
In New York on Tuesday, the Dow Jones Industrial Average rose 0.3%, the S&P 500 added 0.7% and the Nasdaq Composite surged 1.4%.
The Shanghai Composite fell 0.7% in afternoon trade. It was the first time the Shanghai market re-opened after the Chinese New Year break. The Hang Seng Index in Hong Kong was down 0.9%. Tokyo's Nikkei 225 ended 0.1% higher, while the S&P/ASX 200 in Sydney added 0.5%.
The US Postal Service said Tuesday it was temporarily suspending inbound parcels from China and Hong Kong, shortly after President Donald Trump's imposition of fresh tariffs targeting Beijing.
The halt will take place "until further notice," and follows Trump's order for an additional 10% levy on Chinese imports starting Tuesday.
Against the dollar, the pound was flat at USD1.2500 early Wednesday, from USD1.2481 at the time of the London equities close on Tuesday. The euro rose to USD1.0399 from USD1.0376. Against the yen, the dollar faded to JPY153.10 from JPY154.58.
Swissquote analyst Ipek Ozkardeskaya also noted earnings from Alphabet failed to inspire investors.
"Google announced better-than-expected earnings per share but a slight miss on the revenue growth. More importantly, growth in Google Cloud was just 30% (lower than the 32% expected by analysts) and slowing. The combination of slowing cloud revenue and massive AI investment – which will reach reportedly USD75 billion at Google this year – raises a few eyebrows among investors," the analyst said.
Chief Financial Officer Anat Ashkenazi said the majority of the spend is going to go towards technical infrastructure, which includes servers and data centres.
Ashkenazi explained that Alphabet is seeing "very strong demand for our AI products" and "we exited the year with more demand than we had available capacity".
Alphabet fell 7.3% after hours.
A barrel of Brent fell to USD75.77 early Wednesday from USD76.19 at the time of the closing bell in London on Tuesday. Gold rose to USD2,867.20 an ounce, a record high, from USD2,840.78.
"Tuesday's escalation sent a clear message—China isn't backing down. Beijing hit back with its own tariffs, and Trump doubled down, saying he's in no rush to patch things up with Xi," SPI Asset Management analyst Stephen Innes commented.
"On the ground in Shanghai, the fear is real. Gold shops are flooded, with people scrambling to hedge against economic turbulence. Gold prices are smashing records, fueled by trade war anxieties and global geopolitical instability."
Fresnillo was among the best large-cap performers, rising 1.8% as the gold miner tracked bullion higher.
GSK topped the FTSE 100, surging 6.2%. The drugmaker announced a GBP2 billion share buyback programme to be implemented over the next 18 months. It also upped its 2031 sales target.
Edison analyst Neil Shah commented: "GSK is positioning itself as a leader in respiratory, oncology, and HIV treatments. The focus now will be on executing its ambitious R&D plans while ensuring continued financial discipline."
Elsewhere in London, Ferrexpo continued to slide, losing 9.1% after a 23% slump on Tuesday. The iron ore pellets producer fell after it updated on proceedings against the group's subsidiary Ferrexpo Poltava Mining in Ukraine.
FPM has now received information that a civil claim was filed seeking joint liability of FPM and its general director for damages amounting to around USD3.76 billion in favour of the Ukrainian state.
"Initial accusations on the illegal sale of waste products have transformed into accusations that FPM is illegally mining and selling subsoil (minerals other than iron ore), which is said to have caused damage to the environment. FPM rejects these allegations in their entirety on the basis that there was no illegal extraction of the subsoil. FPM mines and extracts iron ore according to its mining licence. The iron ore is then processed to produce iron ore pellets. As a result of these processes, any waste that is leftover is stockpiled in accordance with best mining practices and in compliance with environmental standards," Ferrexpo said.
"Based on information received by the group and with advice from Ukrainian legal counsel, FPM is of the view that these accusations and claim are without merit and FPM intends to vigorously defend its position in the Ukrainian courts."
Marine services firm James Fisher & Sons rose 9.8%. It hailed a "solid overall trading performance" through the second half of 2024.
It expects underlying operating profit of around GBP29 million, ahead of current market expectations.
"I am encouraged by our 2024 performance which will show underlying profit ahead of expectations together with an improved cash position. We ended the year in a stronger position having continued to execute on our turnaround strategy, including undertaking disposals and refinancing our debt facilities. As a result, we are now beginning to see the benefits of our transformation programme coming through," Chief Executive Officer Jean Vernet said.
By Eric Cunha, Alliance News news editor
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