16th Oct 2025 09:01
(Alliance News) - Stock prices in Europe opened lower on Thursday, on worries surrounding US-China tensions, while sterling perked up despite a mixed UK gross domestic product report.
The FTSE 100 index was down 22.24 points, 0.2%, at 9,402.51. The FTSE 250 was 44.26 points lower, 0.2%, at 21,976.70, and the AIM All-Share was up 1.23 points, 0.2%, at 788.65.
The Cboe UK 100 was down 0.4% at 940.27, the Cboe UK 250 was also 0.4% lower at 19,210.59, and the Cboe Small Companies was 0.1% lower at 17,830.78.
In Paris, the CAC 40 was down 0.2%, while Frankfurt's DAX 40 shed 0.5%.
Sterling advanced to USD1.3426 on Thursday morning in London, from USD1.3395 at the time of the London equities close on Wednesday. The euro rose to USD1.1655 from USD1.1635, while against the yen, the buck fell to JPY151.00 from JPY151.20.
The yield on the 10-year US Treasury widened to 4.03% on Thursday from 4.02% at the time of the London equities close on Wednesday. The 30-year yield stretched to 4.62% from 4.61%.
US Treasury Secretary Scott Bessent slammed Beijing's rare earth export curbs Wednesday as "China versus the world," vowing that Washington and its allies would "neither be commanded nor controlled."
"This should be a clear sign to our allies that we must work together, and work together we will," Bessent told reporters at a press conference. "We are not going to let a group of bureaucrats in Beijing try to manage the global supply chains."
His comments came as global economic leaders gather in Washington this week for the International Monetary Fund and World Bank's fall meetings.
"We should work together to de-risk and diversify our supply chains away from China as quickly as possible," Bessent urged.
A trade war between Washington and Beijing has reignited in US President Donald Trump's second term, with tit-for-tat duties reaching triple-digit levels at one point, snarling supply chains.
Both sides have de-escalated tariff levels but their truce remains shaky and is set to expire in early November.
With the latest controls surrounding rare earths, Trump has threatened an additional 100% tariff on goods from China starting November 1.
Trump on Wednesday added to a sense of unease when he told reporters the countries were involved in a trade war.
"Well, you're in one now," he replied to a reporter who questioned whether they were on course for a sustained trade war if he did not reach an agreement with Chinese counterpart Xi Jinping.
In China, the Shanghai Composite was up 0.1%, while the Hang Seng Index in Hong Kong was 0.1% lower. Tokyo's Nikkei 225 surged 1.3%, while Sydney's S&P/ASX 200 ended 0.9% higher.
In New York on Wednesday, the Dow Jones Industrial Average closed marginally lower, the S&P 500 added 0.4% and the Nasdaq Composite climbed 0.7%.
Rabobank analysts commented: "The US-China trade war is flaring up again, and the US government is still shutdown. But it’s also earnings season and we have AI deals, so stocks are going higher. How long will that last? And if the S&P 500 suddenly does become sensitive to the unravelling of international relations and global trade, who caves first?
"According to Treasury Secretary Bessent, it won’t be the US government. They will not negotiate with China, just because the stock market is going down. That’s easy to say when markets are still going up, but will they stick to it?"
The UK economy achieved minor growth in August, numbers from the Office for National Statistics showed, though a reading for July was downwardly revised.
Monthly growth of 0.1% for August was reported, but July's reading was nudged down to a 0.1% decline. The ONS had initially reported that gross domestic product was flat in July.
"Today's GDP release, while meeting expectations, was overshadowed by backward revisions," analysts at Deutsche Bank commented.
"Where is Q3-25 GDP growth tracking? On our estimates, we see Q3-25 GDP growth tracking closer to 0.2% q/q – roughly half the pace pencilled in by the Bank of England."
An ounce of gold rose to USD4,229.71 an ounce early Thursday, from USD4,199.71 late Wednesday afternoon in London. Brent rose to USD62.64 a barrel from USD62.20.
In London, Whitbread shares slumped 9.4%. The Premier Inn owner said pretax profit fell 7.1% to GBP287 million in the half-year to August 28, from GBP309 million 12 months earlier. Revenue declined 1.8% to GBP1.54 billion from GBP1.57 billion, but beat GBP1.53 billion consensus.
Looking ahead, Whitbread said it remains "confident" in the full year outlook.
"While forward visibility remains limited and despite some uncertainty around the forthcoming UK budget, positive trading momentum and encouraging levels of bookings into future periods in both the UK and Germany mean we remain confident in the full year outlook," the firm said in a statement.
But it lowered expectations for its German business and now expects full year adjusted pretax profit of up to GBP5 million, versus previous guidance of GBP5 million to GBP10 million.
Croda added 2.4%. The chemicals firm left its annual outlook unchanged. Sales in the three months to September 30 improved 4.4% on-year to GBP424.7 million from GBP406.6 million. At constant currency, they rose 6.5%.
"As anticipated, customer demand in Q3 was similar to Q2, with sequential sales ahead in a more challenging market environment," Croda said.
Croda said US tariffs "contributed to volatility" in the third quarter.
"We expect the more challenging trading environment and low order book visibility to continue for the remainder of the year. In line with previous years, absolute sales in Q4 are likely to be seasonally lower than in the first three quarters as customers typically manage their working capital into the year end. Despite this, the combination of good year-to-date sales growth and delivery of anticipated cost savings means that our full year 2025 outlook is unchanged," it added.
Croda still expects GBP265 million to GBP295 million in adjusted pretax profit at constant currency in 2025. Adjusted pretax profit on a constant currency basis was GBP273.1 million in 2024.
Elsewhere in London, Sabre Insurance shares rose 4.2%. The motor insurance underwriter said gross written premiums are down year-to-date, but it is seeing "signs of claims inflation moderating".
Gross written premiums in the first nine months of the year declined 19% to GBP151.7 million from GBP186.5 million.
Sabre still expects annual profit in line with 2024.
By Eric Cunha, Alliance News news editor
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