22nd May 2025 09:01
(Alliance News) - European stocks declined after the opening bell on Thursday, after US fiscal concerns send stocks in New York tumbling overnight.
The FTSE 100 index traded down 43.86 points, 0.5%, at 8,742.60. The FTSE 250 was down 97.95 points, 0.5%, at 20,851.72, and the AIM All-Share was down 2.73 points, 0.4%, at 734.47.
The Cboe UK 100 was down 0.6% at 871.26, the Cboe UK 250 was 0.3% lower at 18,284.10, and the Cboe Small Companies was 0.2% higher at 16,578.68.
In Paris, the CAC 40 fell 0.7%, while Frankfurt's DAX 40 lost 0.8%.
In New York on Wednesday, the Dow Jones Industrial Average closed down 1.9%, the S&P 500 lost 1.6% and the Nasdaq Composite fell 1.4%.
In Tokyo on Thursday, the Nikkei 225 ended 0.8% lower. In China, the Shanghai Composite was down 0.2%. The Hang Seng Index in Hong Kong shed 1.3%. In Sydney, the S&P/ASX 200 fell 0.5%.
The yield on the US 10-year Treasury was quoted at 4.58% early Thursday UK time, widening from 4.54% at the time of the London equities close on Wednesday. The yield on the US 30-year Treasury widened to 5.09% from 5.02%.
US bond yields stretched after a 20-year auction saw weak demand, compounding fiscal worries that had also been worsened by a credit rating knock from Moody's late last week.
SPI Asset Management analyst Stephen Innes commented: "The marquee 20-year auction was billed as must-watch TV—and it didn't disappoint the bears. It cleared at 5.047%, the highest since the tenor was reintroduced in 2020, and more importantly, it tailed. That may sound like a whisper, but in bond market speak, it was a scream. 30-year yields spiked 11bps, 10s jumped 10bps—duration got smoked. But the headline wasn't the auction. It was the message: investors want more premium to hold US paper—and they want it now."
Republicans announced Wednesday they will vote early Thursday on US President Donald Trump's sprawling domestic policy mega-bill pairing tax relief with spending cuts that critics say would decimate health care while ballooning the debt.
The "One Big, Beautiful Bill Act" would usher into law Trump's vision for a new "Golden Age," achieved through cuts to public services to pay for a 10-year extension of his 2017 tax cuts.
But it is dangling by a thread, with independent analysts warning it will increase the deficit by as much as USD4 trillion over a decade, rattling fiscal hawks who say the country is careening toward bankruptcy.
Analysts at ING commented: "House Republicans may have reached some agreement on Trump's flagship 'Big, Beautiful Bill', which has caused market concern over the deficit and raised downside risks for the dollar. There are tentative signs of stabilisation in Treasuries and US stock futures this morning, and the USD can find some support, but a sustained recovery looks unlikely."
The pound traded at USD1.3424 early Thursday, down from USD1.3443 at the time of the London equities close on Wednesday. The euro faded to USD1.1313 from USD1.1389. Against the yen, the dollar fell to JPY143.08 from JPY143.63.
A barrel of Brent fell to USD64.05 a barrel from USD65.08. Gold rose to USD3,328.48 an ounce from USD3,312.03.
The weaker Brent price hit Shell and BP, the oil majors down 1.0% and 1.8%.
BT shares fell 4.8%, as it reported growth in annual profit and set out a lofty fibre roll-out target.
The telecoms firm said "lower international sales and handsets" weighed on its top line, however.
In the year to March 31, pretax profit rose 12% GBP1.33 billion from GBP1.19 billion. BT's profit was aided by the non-repeat of a GBP488 million impairment of goodwill incurred in the prior year.
Revenue weakened 2.1% to GBP20.36 billion from GBP20.80 billion. Adjusted revenue fell at roughly the same pace to GBP20.37 billion from GBP20.84 billion.
Adjusted earnings before interest, tax, depreciation and amortisation improved 1.3% to GBP8.21 billion from GBP8.10 billion.
Normalised free cash flow shot up 25% to GBP1.60 billion.
BT raised its final dividend by 1.2% to 5.76 pence per share from 5.69p. Its total dividend was 2.0% higher at 8.16p per share from 8.00p.
Looking to the new year, it expects an adjusted Ebitda between GBP8.2 billion and GBP8.3 billion. It predicts adjusted revenue of around GBP20 billion.
Chief Executive Allison Kirkby said: "The momentum in, and impact of, our full fibre programme is such that we are now raising our build target by 20% to up to 5 million UK premises in FY26, keeping us comfortably on track to reach 25 million by the end of 2026, while maintaining our cash flow guidance. We are now only one year away from our inflection to GBP2 billion of normalised free cash flow, our target for FY27, and remain on track to deliver GBP3 billion by the end of the decade."
BT shares, like much of the market, struggled last month amid a broad-based sell-off on tariff worries. Shares went into Thursday's results up over 10% since its April trough. Since the end of last year, shares are also up more than 10%.
In a sign of unease in the market, utilities were among those outperforming on Thursday. SSE rose 0.6%, National Grid added 0.3% and United Utilities rose 0.2%.
JD Sports attracted some bargain hunters, with the stock up 2.2% after sinking 11% on Wednesday following poorly-received annual results.
Johnson Matthey jumped 28%, the best FTSE 250 performer. It reported a rise in annual profit and said it has agreed to sell its Catalyst Technologies business to Honeywell International for GBP1.8 billion, promising to return the bulk of that sum to shareholders.
Following the sale, Johnson Matthey said it will be sleeker outfit, focused on its emission reduction technology and platinum group metals offerings.
It plans to return GBP1.4 billion of the sale proceeds, around GBP8 per share, to shareholders. The deal is expected to be completed by the first half of the 2026 calendar year.
For the year ended March 31, revenue fell 9.1% to GBP11.67 billion from GBP12.84 billion. However, its pretax profit jumped to GBP486 million from GBP164 million. Its bottom line was helped by a GBP482 million profit booked on the disposal of businesses.
At the other end of the 250s, Bloomsbury Publishing slumped 14%. It reported growth in annual revenue but a decline in profit.
Pretax profit in the year to February 28 fell 22% to GBP32.5 million from GBP41.5 million. Revenue weakened 5.3% to GBP361.0 million from GBP342.7 million.
Administrative expenses increased 11% to GBP115.9 million, while marketing and distribution costs were 9.6% higher at GBP54.6 million.
Bloomsbury raised its final dividend by 5.0% to 11.54p per share, taking its total payout 5.0% higher also to 15.43p.
In addition, Bloomsbury announced Penny Scott-Bayfield has announced her intention to step down as finance director to "pursue a portfolio career".
Edison analyst Fiona Orford-Williams commented: "There is a strong slate of releases scheduled for the current financial year, including the paperback editions of Sarah J. Maas's House of Flame and Shadow, and of Gillian Anderson's Want. On the non-consumer front, the budgetary pressures on the academic markets in the US and UK were inevitably going to present a challenge, which the group is tackling through increasing its geographical reach, with Singapore opening a new front, and through building up its content - particularly in terms of digital resource."
Elsewhere in London, Norman Broadbent jumped 23%. As the recruitment firm said it has continued to "perform very well" in 2025.
Ahead of its annual general meeting Thursday, it said trading so far in the second quarter is "materially ahead of the equivalent period last year".
"This performance reflects the company's ongoing discipline and agility in navigating challenging market conditions, underpinned by a strong and focused team and increased contribution from recent joiners," Norman Broadbent said.
By Eric Cunha, Alliance News news editor
Comments and questions to [email protected]
Copyright 2025 Alliance News Ltd. All Rights Reserved.
Related Shares:
Norman BroadbBloomsburyJohnson MattheyJD SportsNational GridUnited UtilitiesSSEBTShellBP