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London open: FTSE nudges up; GSK surges on guidance upgrade
London stocks nudged higher in early trade on Wednesday as investors mulled disappointing US tech results and continued to assess the impact of Trump’s trade war.
At 0830 GMT, the FTSE 100 was up 0.1% at 8,577.75.
Kathleen Brooks, research director at XTB, said: “Risk appetite continues to dwindle this week and European shares have opened lower, although the FTSE 100 is eking out a gain. There is too much uncertainty which is eroding the foundations of a broad-based stock market rally as we move through February. The two big themes driving markets right now are earnings reports and the threat of tariffs, which are tricky for investors to navigate.
“As we mentioned on Tuesday, the majority of companies on the S&P 500 that have reported earnings, have beaten estimates, and the market is rewarding stocks who do beat earnings estimates by a higher margin than average. This also means that the opposite is true. Companies are getting punished if their earnings disappoint. This is why Alphabet is expected to open significantly lower on Wednesday, and chip maker AMD could follow suit.
“Alphabet reported Q4 revenues of $81.6bn, which was lower than the $82.8bn expected. The company boosted its capex spend by more than expected, capex will be $75bn in 2025, vs expectations of $57.9bn. This is a significant increase, and it shows that Alphabet is throwing the kitchen sink at its AI plans.”
In UK equity markets, pharma giant GSK surged to the top of the FTSE 100 as it missed forecasts slightly with its annual results, but raised its guidance for long-term growth and announced plans to buy back £2bn of stock over the next 18 months.
Sales in 2024 increased by 3% to £31.38bn, slightly short of the £32bn expected by analysts, while core earnings per share rose 3% to 159.3p, missing the 163.9p consensus estimate.
However, due to progress in its late-stage drug pipeline, GSK upped its 2031 sales outlook to more than £40bn, from £38bn previously.
Private housing provider Grainger was in the black as it said net rental income rose 15% year-on-year in the four months to the end of January 2025, driven by strong demand and portfolio growth.
Housebuilder Crest Nicholson was boosted by an upgrade to ‘buy’ at Investec.
On the downside, Ferrexpo slid again, having tumbled late on Tuesday after it said a civil claim worth 157 billion Ukrainian hryvnia (£3bn) had been filed against its Ukrainian unit Ferrexpo Poltava Mining (FPM) in relation to the alleged sale of waste products from the production of iron ore pellets.
Sales, marketing and support services group DDC lost ground as it said operating profit in its technology segment declined in the third quarter due to a weak market for consumer technology products in the UK and Europe over the holiday season.
Spirax was also on the back foot after a downgrade to ‘hold’ at HSBC.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Banco Santander S.a. | +6.29% | +26.50 | 448.00 |
| 2 |  |
Gsk Plc | +5.33% | +73.50 | 1,453.50 |
| 3 |  |
South32 Limited | +2.05% | +3.50 | 174.30 |
| 4 |  |
Vodafone Group Plc | +1.69% | +1.10 | 66.20 |
| 5 |  |
Flutter Entertainment Plc | +1.25% | +260.00 | 21,130.00 |
| 6 |  |
Bt Group Plc | +0.85% | +1.20 | 143.05 |
| 7 |  |
Smurfit Westrock Plc | +0.68% | +29.00 | 4,291.00 |
| 8 |  |
Bp Plc | +0.56% | +2.35 | 424.55 |
| 9 |  |
International Consolidated Airlines Group S.a. | +0.52% | +1.80 | 348.90 |
| 10 |  |
Glencore Plc | +0.50% | +1.75 | 350.35 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Spirax Group Plc | -2.96% | -235.00 | 7,705.00 |
| 2 |  |
Ck Infrastructure Holdings Limited | -2.82% | -15.80 | 544.60 |
| 3 |  |
Halma Plc | -1.81% | -54.00 | 2,936.00 |
| 4 |  |
Diageo Plc | -1.37% | -32.00 | 2,295.50 |
| 5 |  |
Weir Group Plc | -1.36% | -32.00 | 2,322.00 |
| 6 |  |
Next Plc | -1.25% | -122.00 | 9,604.00 |
| 7 |  |
Scottish Mortgage Investment Trust Plc | -1.22% | -13.00 | 1,054.50 |
| 8 |  |
Barratt Redrow Plc | -1.19% | -5.40 | 446.70 |
| 9 |  |
Diploma Plc | -1.19% | -54.00 | 4,498.00 |
| 10 |  |
Associated British Foods Plc | -1.09% | -20.00 | 1,823.00 |
US close: Stocks higher as tariffs remain in focus
Major indices closed higher on Tuesday as the effects of the new White House administration’s tariffs on a number of its closest trading partners continued to be digested.
At the close, the Dow Jones Industrial Average was up 0.30% at 44,556.04, while the S&P 500 advanced 0.72% to 6,037.88 and the Nasdaq Composite saw out the session 1.35% firmer at 19,654.02.
The Dow closed 134.13 points higher on Tuesday, reversing losses recorded in the previous session after Donald Trump signed an order to impose 25% tariffs on Mexico and Canada, plus a 10% levy on China.
Sentiment got a boost late on Monday after Trump said the duty on Mexican goods would be paused for a month and later agreed to halt the implementation of tariffs against Canada for at least 30 days.
China, however, slapped tariffs of up to 15% on US imports of coal and liquefied natural gas and 10% higher duties on crude oil, farm equipment and selected cars, with effect from 10 February. It also vowed to file a lawsuit with the World Trade Organisation.
Trump also indicated over that the UK and the European Union were next up for a fresh round of tariffs, stating that both were “out of line”. While he noted that a deal could possibly be “worked out” with the UK, he stated that EU tariffs “will definitely happen”.
In the corporate space, shares in music streaming giant Spotify were up double-digits ahead of the bell on Tuesday after its Q4 earnings beat revenue expectations and it reported its first full-year profit, while PepsiCo fell short of estimates with its latest quarterly revenue performance, and Estee Lauder said Q2 gross profits had fallen 2% on the back of a 6% decline in net sales.
After the close, Google parent company Alphabet was in the red in extended trading after posting a quarterly earnings miss on the back of weaker-than-expected cloud sales, while chipmaker AMD traded higher thanks to a Q4 earnings beat and strong forward guidance.
On the macro front, new orders for goods manufactured in the US sank 0.9% month-on-month to $578.5bn in December, according to the Census Bureau, extending November’s revised 0.8% drop and missing market expectations for a smaller 0.7% decline. Transportation goods orders were down 7.4% to $86.14bn due to a plunge in non-defence aircraft orders.
Elsewhere, US job openings fell by 556,000 to 7.6m in December, according to the Census Bureau, missing market expectations for a reading of 8.0m and indicating a gradual cooling of the labour market. Over the same period, hires rose by 89,000 to 5.5m, while total separations were up by 38,000 at 5.3m.
Wednesday newspaper round-up: Thames Water, Johnson & Johnson, BoE
Thames Water may need as much as £10bn in debt and equity investment to repair its finances, according to a representative of creditors hoping to lend the struggling utility another £3bn. London’s high court heard evidence on Tuesday that suggested the UK’s largest water company may need significantly more resources than the roughly £6.3bn it has previously indicated. – Guardian
Lawyers representing 3,500 claimants are preparing to sue the pharmaceutical firm Johnson & Johnson (J&J) over alleged links between talcum powder and cancer, in what is expected to be one of the largest pharmaceutical product group actions in English and Welsh legal history. They claim that thousands of women and some men contracted cancers after using J&J talcum powder products that had been contaminated with asbestos. – Guardian
An increase in the use of smart doorbells by wealthy households is partly to blame for the crisis plaguing Britain’s jobs market data, the UK’s chief statistician has said. Sir Ian Diamond told MPs that the Office for National Statistics’ (ONS) struggles with unreliable jobs data were partly caused by people in “advantaged areas” with camera doorbells who were ignoring its interviewers. – Telegraph
Octopus Energy’s profits more than halved last year as it spent more money in its race to overtake British Gas as Britain’s largest household energy supplier. The supplier, which now serves almost 12.9m household accounts across the UK, said on Tuesday that pre-tax profits fell to £77.6m over the year to May 2024 from £283m the prior year. That was accompanied by a 1pc dip in turnover, which fell to £12.4bn. – Telegraph
Google’s parent company, Alphabet, reported lower-than-expected sales from its cloud computing business, stoking concerns about the payoff from its big bet on artificial intelligence. Revenue from the cloud computing business, which sells services to companies adopting AI technology, rose 30 per cent to $12 billion in the fourth quarter. – The Times
The Bank of England should prioritise stimulating a stagnant UK economy over restraining persistent inflation and cut interest rates this Thursday, according to The Times shadow monetary policy committee. The nine members of the shadow monetary policy committee (MPC) voted 5-4 in favour of lowering the UK base rate by a quarter of a percentage point to 4.5 per cent this week, marking the third cut since the Bank of England started loosening policy last summer. – The Times
