27th Mar 2025 09:16
(Alliance News) - London opened in the red on Thursday, as investor appetite is weakened by Wednesday's downgraded UK economic forecast and new US tariffs on cars begin to hit the automobile sector.
The FTSE 100 index opened down 57.27 points, 0.7%, at 8,632.25. The FTSE 250 was down 74.92 points, 0.4%, at 19,964.40, and the AIM All-Share was just 0.29 points at 694.10.
The Cboe UK 100 was down 0.7% at 862.23, the Cboe UK 250 was 0.4% lower at 17,438.09, and the Cboe Small Companies was 0.6% higher at 15,640.40.
In European equities on Thursday, the CAC 40 in Paris was down 0.8%, while the DAX 40 in Frankfurt was down 1.2%.
The Office for Budget Responsibility on Wednesday halved its 2025 growth forecast for the UK economy to 1%.
Lower-income households in the UK are forecast to become GBP500 a year poorer over the next five years as a result of the chancellor's spring statement, according to the Resolution Foundation think tank.
Rachel Reeves has received criticism from unions and political opponents after she cut welfare and squeezed Whitehall budgets in her spring statement, with some three million families on incapacity benefits expected to be hit by the changes.
An estimated 250,000 more people, including 50,000 children, will be left in relative poverty after housing costs by the end of the decade as a result of the government's squeeze on welfare, according to its own impact assessment.
The changes will affect about three million families on incapacity benefits, while 800,000 claimants will have reduced personal independence payments, Pip.
In the US on Wednesday, Wall Street ended lower, with the Dow Jones Industrial Average down 0.3%, the S&P 500 fading 1.1% and the Nasdaq Composite slipping 2.0%.
"All the major US indices ended down yesterday with the tech-heavy Nasdaq feeling the worst of it as both Nvidia and Tesla slid more than 5%. Nasdaq futures point to more weakness later today. Nvidia’s fall came as reports emerged of Chinese regulators excluding Nvidia's H20 chip from a list of environmentally friendly microchips for data centres. Nvidia’s right up there when it comes to power efficiency and has navigated export restrictions to China with aplomb. China’s also a smaller part of the revenue mix than it was so there’s reason to hope that the current share price weakness will prove to be a blip rather than a trend," commented Hargreaves Lansdown analyst Derren Nathan.
"The cooling in Tesla shares follows a sharp recovery early in the week, which has been stopped in its tracks by Donald Trump’s decision to slap a 25% tariff on overseas cars with immediate effect. That’s had a ripple effect dragging down Japan’s Nikkei, South Korea’s KOSPI and the Euro STOXX 600."
The US has announced a 25% tariffs on cars imported into the US in a bid to boost the domestic auto industry, which will go into effect on April 2 and apply to all cars not made in the US. This means even US manufacturers with models made overseas would be hurt under the scheme.
The UK is not planning "at the moment" to introduce retaliatory tariffs on the US, Chancellor Rachel Reeves has said.
Aston Martin on Wednesday morning slipped 5.8%, Tesla was down 1.7% in pre-market trade in New York and Volkswagen in Frankfurt opened 2.8% lower.
In Asia on Thursday, the Nikkei 225 index in Tokyo was down 0.6%. In China, the Shanghai Composite was up 0.2%, while the Hang Seng index in Hong Kong was 0.4% higher. The S&P/ASX 200 in Sydney closed down 0.4%
Retailer Next led the FTSE 100 at London's market open on Thursday, up 8.2%.
Next reported pretax profit decline of 3.2% for the year that ended January 25, to GBP987.0 million from GBP1.02 billion. Revenue, on the other hand, grew 11% to GBP6.12 billion from GBP5.49 billion.
Distribution costs rose 11% to GBP878.8 million from GBP794.1 million, administrative expenses increased 2.0% to GBP670.6 million from GBP657.7 million, while finance costs were up 10% to GBP96.6 million from GBP87.5 million. The lower net margin was due in part to the rise in national insurance, the company noted.
The clothing and homewares seller proposed a final dividend of 158 pence per share, up 12% on-year from 141p, bringing the total dividend for the year up 13% to 233p from 207p. Next also said it intends to return GBP316 million in surplus cash to shareholders via buybacks.
Next anticipates a 0.5% fall in like-for-like sales in its Retail arm for the year ahead, too.
Mobile Streams was also one of Wednesday's winners on AIM, up 20%.
The mobile gaming content provider notes the launch of online casino and sportsbook business Estadio Gana in Mexico. Mobile Streams currently holds a 29.94% stake in Estadio Gana.
On the other end, ADVFN tumbles 50% as it proposes delisting.
"The board believes the disadvantages associated with maintaining the admission of the Ordinary Shares to trading to be disproportionately high when compared to the perceived benefits of being quoted on AIM," the firm explained.
Shareholder approval for the cancellation will be sought at a general meeting on April 25.
The provider of global stock market information to private investors reported a narrowed pretax loss of GBP453,000 for the six months that ended December 31, from a restated GBP532,000 loss. Revenue declined 13% to GBP2.0 million from GBP2.3 million and administrative expenses reduced 11% to GBP2.5 million from GBP2.8 million.
Educational software and services provider Tribal Group was down 8.8%.
Tribal's pretax profit fell 11% to GBP5.9 million in 2024 from GBP6.6 million in 2023, despite revenue growing 5.0% to GBP90.0 million from GBP85.7 million. Exceptional items reached GBP5.6 million in costs for the year, against GBP3.3 million a year prior.
Tribal proposed a final dividend of 0.65p per share, bringing the total dividend for 2024 to 1.3p.
The pound was quoted up at USD1.2923 early on Thursday in London, compared to USD1.2894 at the equities close on Wednesday. The euro stood lower at USD1.0775, against USD1.0788.
Against the yen, the dollar was trading up at JPY150.56 compared to JPY150.53.
Brent oil was quoted lower at USD72.80 a barrel early in London on Thursday from USD73.95 late Wednesday.
Gold was quoted higher at USD3,036.76 an ounce against USD3,018.09.
Still to come on Thursday's economic calendar, US initial jobless claims, quarterly personal consumption expenditures and GDP figures at 1230 GMT.
By Emily Parsons, Alliance News reporter
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