14th Oct 2025 08:55
(Alliance News) - Stock prices in Europe opened on the back foot on Tuesday, with trade war nerves hurting sentiment ahead of the start of the US banking earnings season.
In the UK, a rise in the jobless rate and mixed pay data sent the pound below USD1.33.
Gold continued to shine, meanwhile.
The FTSE 100 index was down 29.09 points, 0.3%, at 9,413.78. The FTSE 250 was 112.11 points lower, 0.5%, at 21,952.21, and the AIM All-Share was down just 0.16 of a point at 792.31.
The Cboe UK 100 was down 0.4% at 941.07, the Cboe UK 250 was 0.6% lower at 19,244.40, and the Cboe Small Companies was flat at 17,760.55.
In Paris, the CAC 40 and the DAX 40 in Frankfurt each shed 0.8%.
In Tokyo on Tuesday, the Nikkei 225 ended down 2.6%. Financial markets in Tokyo had been closed on Monday. In China, the Shanghai Composite was down 0.6%, while the Hang Seng Index in Hong Kong was 1.9% lower. Sydney's S&P/ASX 200 closed up 0.2%.
"China has ramped up retaliation against the US trade investigation, and markets are again jittery about the prospects of a fully-fledged re-escalation," analysts at ING commented.
China said on Tuesday it was ready to "fight to the end" in a trade war with the US after President Donald Trump said he would impose an additional 100% tariff on the world's second-largest economy.
"On the matter of tariff wars and trade wars, China's position remains consistent," an unnamed commerce ministry spokesperson said.
"If you wish to fight, we shall fight to the end; if you wish to negotiate, our door remains open."
Concerns spiked over the weekend that the trade war between the world's top two economies will worsen after Trump announced extra 100% tariffs on all Chinese goods.
Traders returned to desks in Tokyo, meanwhile, amid a cloud of political uncertainty.
Analysts at Deutsche Bank commented: "Japanese markets are being hit the most this morning...with continued reverberations around the collapse of the ruling coalition late last week which puts some concerns as to whether new LDP leader Sanae Takaichi can still get enough votes to be elected PM."
Sterling fell to USD1.3258 early Tuesday, from USD1.3331 late Monday. Against the dollar, the euro fell to USD1.1558 from USD1.1569. Versus the yen, the dollar traded at JPY151.98, easing from JPY152.30.
The UK unemployment rate unexpectedly rose in the three months to August, numbers on Tuesday showed, though total earnings growth was higher than predicted.
According to the Office for National Statistics, the jobless rate was 4.8% in the three months to August, rising from 4.7% in the three months to July.
It had been expected to stay at 4.7%, according to consensus cited by FXStreet.
The ONS said payrolled employees in the UK fell by 93,000 on-year in August alone but did rise by 10,000 on-month. The early estimate for September, which the ONS warns is likely to be revised, payrolled employees fell by 100,000 on-year and by 10,000 on-month to 30.3 million.
"The estimated number of vacancies in the UK fell by 9,000 (1.3%) on the quarter, to 717,000, in July to September 2025. This is the 39th consecutive period where vacancy numbers have dropped compared with the previous three months," the ONS said.
Annual growth in regular earnings, so excluding bonuses, was 4.7% in the three months to August, easing from 4.8% in the three months to July. The figure landed in line with consensus.
Total pay growth, however, surprisingly accelerated to 5.0% from 4.8%. It had been expected to cool to 4.7%.
The yield on the US 10-year Treasury was quoted at 4.01% early Tuesday, easing from 4.04% at the time of the London equities close on Monday. The yield on the US 30-year Treasury was tamer at 4.61% compared to 4.62%.
Gold burst through the USD4,100 an ounce mark on Monday and advanced further early Tuesday. It traded at USD4,119.79 an ounce, rising from USD4,093.56 at the time of the London equities close on Monday. It had earlier on Tuesday set a new record high of USD4,179.75 an ounce.
A barrel of Brent fell to USD62.49 from USD63.40.
In London on Tuesday, easyJet was the best large-cap performer, surging 7.2%. Italian daily Corriere della Sera on Tuesday reported shipping firm Mediterranean Shipping Co is among those mulling investing, or taking full control of the budget carrier. MSC is working in tandem with an investment fund, Corriere said, citing three sources familiar with the matter.
easyJet is "landing on the desks of several individuals" interested in investing in it, Corriere reported.
"These are preliminary assessments. And it's not a given that the low-cost carrier's board will accept offers," Corriere added.
MSC had also looked at American low-cost airline Spirit and Portuguese flag carrier TAP as alternatives, but easyJet is deemed more attractive.
Housebuilders traded higher, with Bellway up 5.4% and Persimmon rising 3.0%.
Bellway reported an increase in annual earnings, but cautioned that "weak consumer sentiment" has persisted. For the year to July 31, pretax profit rose 21% to GBP221.9 million from GBP183.7 million, as revenue climbed 17% to GBP2.78 billion from GBP2.38 billion.
Bellway lifted its final dividend by 29% to 49.0 pence per share from 38.0p, meaning a total dividend of 70.0p, up 30% from 54.0p. Bellway also announced the start of an initial tranche of GBP75 million of a GBP150 million share buyback programme.
Housing completions for the year rose 14% to 8,749, it said.
"Bellway has delivered a good performance in FY25 with double-digit growth in volume output and profits, and our sharper focus on balance sheet efficiency is reflected by the GBP150 million share buyback programme announced today," CEO Jason Honeyman said. "While we face some near-term market challenges, we have a high-quality land bank, strong balance sheet and the operational capacity to capitalise on the positive long-term fundamentals of our industry. Combined with our refreshed and disciplined approach to capital allocation, I am confident that we can drive increased volume output, cash generation and shareholder returns in FY26 and beyond."
Since the start of the new financial year, "there has been a continuation of weak consumer sentiment which has carried from late spring", Bellway cautioned.
"Customer demand has been affected by ongoing affordability constraints and uncertainties about potential taxation changes in the government's budget in November 2025," it adds.
Elsewhere in London, Fevertree rose 4.7%. Jefferies lifted the stock to 'buy' from 'hold'.
Across the Atlantic, US banks kick off the earnings season. Numbers from Citigroup, Goldman Sachs, JPMorgan Chase and Wells Fargo come on Tuesday, with Bank of America and Morgan Stanley following on Wednesday.
XTB analyst Kathleen Brooks commented: "Banks are an important source of information about the state of the US economy, and there is lots of anticipation about what bank CEO's might say about tariffs, the economic outlook, and the strength of the US consumer."
By Eric Cunha, Alliance News news editor
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