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London open: FTSE falls as investors mull Trump’s reciprocal tariffs
London stocks edged lower in early trade on Friday as investors mulled US President Trump’s reciprocal tariffs announcement.
At 0835 GMT, the FTSE 100 was down 0.3% at 8,735.50.
On Thursday, Trump announced reciprocal tariffs which will target every country that charges duties on US imports.
He told reporters in the Oval Office: “On trade, I have decided for purposes of fairness, that I will charge a reciprocal tariff, meaning whatever countries charge the United States of America, we will charge them. No more, no less.”
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “As the world holds its breath in anticipation of where the latest round of US tariffs will land, the Footsie has lost ground in early trade.
“Although President Trump’s pledge to impose reciprocal tariffs on trade partners has set off a fresh round of uncertainty, the more gradual approach has been tentatively welcomed. With a fresh deadline set for April, he’s essentially triggered fresh rounds of talks, and haggling is set to ensue with leaders.
“The UK government had hopes it may escape the worst of the tariffs given the majority of trade with the US is in services rather than goods. But with Trump’s claims that VAT is a tariff and the digital services tax on tech giants also in scope, trade envoys and ambassador Peter Mandelson will have their work cut out to claim that the UK should be viewed as a special case.
“Like other nations, the UK remains highly vulnerable to the whims of capricious US policy. The pound has regained further form against the dollar, still helped by the better than forecast growth in the UK economy at the end of last year, with traders also sanguine for now about the knock-on effects of US trade policy. This puts a little more pressure on the overseas earnings of the multinationals listed on the FTSE 100, although sterling is still trading 6% lower than its level back in September.”
In equity markets, NatWest fell even as the bank just beat expectations as it grew its loan book and pulled in more deposits, boosted by an increase in customers.
Pre-tax operating profit rose 0.3% to £6.2bn in the 12 months to 31 December compared with estimates of £6.1bn. Net interest margin – the difference between loan and savings rates – was one basis point higher at 2.13%.
The bank reported a return on tangible equity of 17.5%, beating its own upgraded guidance. Total income for the year, excluding one-off items, grew by 2.2% to £14.6bn, reflecting growth in deposit margins and lending.
NatWest said it expected to achieve a return on tangible equity in the range of 15-16% this year and more than 15% by 2027. It expects to generate income of £15.2bn – £15.7bn this year.
HSBC was also in the red following a Bloomberg report that it will initiate a fresh round of layoffs at its investment bank as early as Monday.
It was understood the first cuts will be carried out in Asia and then be expanded to the rest of the lender’s staff. The number of redundancies was not clear.
Wood Group tumbled as it said it had taken actions to mitigate weaker-than-expected trading in the fourth quarter, including cancelling executive and employee bonuses and actively managing working capital at year end.
It also said it was initiating steps to “strengthen significantly” its financial culture, governance and controls after a review by Deloitte identified “material” weaknesses and failures.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Flutter Entertainment Plc | +4.45% | +980.00 | 23,000.00 |
| 2 |  |
South32 Limited | +3.74% | +6.80 | 188.70 |
| 3 |  |
Glencore Plc | +3.20% | +11.05 | 356.50 |
| 4 |  |
Antofagasta Plc | +2.99% | +55.00 | 1,897.00 |
| 5 |  |
Fresnillo | +2.63% | +21.00 | 819.00 |
| 6 |  |
Anglo American Plc | +2.49% | +61.50 | 2,526.50 |
| 7 |  |
Rio Tinto Plc | +1.77% | +89.00 | 5,128.00 |
| 8 |  |
Crh Plc | +1.76% | +148.00 | 8,560.00 |
| 9 |  |
Bhp Group Limited | +1.70% | +35.00 | 2,092.00 |
| 10 |  |
Carnival Plc | +1.27% | +23.50 | 1,868.50 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Natwest | -1.88% | -8.20 | 428.80 |
| 2 |  |
Schroders Plc | -1.77% | -6.80 | 376.80 |
| 3 |  |
Bae Systems Plc | -1.76% | -22.00 | 1,226.00 |
| 4 |  |
Relx Plc | -1.60% | -66.00 | 4,069.00 |
| 5 |  |
Astrazeneca Plc | -1.47% | -176.00 | 11,788.00 |
| 6 |  |
Diageo Plc | -1.46% | -32.00 | 2,153.00 |
| 7 |  |
Unilever Plc | -1.32% | -59.00 | 4,424.00 |
| 8 |  |
Vodafone Group Plc | -1.16% | -0.78 | 66.52 |
| 9 |  |
Haleon | -1.15% | -4.50 | 386.80 |
| 10 |  |
Intercontinental Hotels Group Plc | -0.99% | -105.00 | 10,520.00 |
US close: Stocks jump as Trump tariffs hit delay
US stocks rose strongly on Thursday as concerns about the immediate launch of reciprocal trade tariffs eased following comments from Donald Trump.
The Dow gained 0.8%, the S&P 500 jumped 1% while the Nasdaq rose 1.5%, with all three indices now trading within a whisker of their record highs.
Trump signed a memo to order federal agencies to look at how to match US tariffs to existing levies by other countries, stopping short of actually imposing any additional duties immediately, contrasting what he had promised earlier in the week.
Instead, the reports by the Commerce Department and the US trade representative are expected to be delivered by April 1, easing concerns – at least temporarily – of an escalation in the ongoing trade war.
“Trump’s announcement of more tariffs failed to have much of an impact […] since they are delayed until the beginning of April. Investors have been strengthened in their belief that the tough talk on this front is more of a negotiating tactic,” said Chris Beauchamp, chief market analyst at IG.
Meanwhile, sentiment was also helped by Trump after he said he had spoken with Vladimir Putin about a potential peace deal to end the war with Ukraine.
In economic news, inflation at the wholesale level in the US came in a tad hotter-than-expected at the start of 2024. According to the US Department of Labor, in seasonally adjusted term, so-called final demand prices increased at a month-on-month pace of 0.4% in January, compared with the 0.3% gain estimated. However, the prior month’s rate of increase was revised up from an initial estimate of 0.2% to 0.5%.
Elsewhere on the macro front, initial jobless claims fell by 8,000 to 213,000 in the first week of February, slightly ahead of 6,000 decline predicted by analysts, while continuing claims dropped by 36,000 to 1.85m, also under forecasts of 1.88m. The four-week moving average, which aims to strip out week-to-week volatility, decreased by 1,000 to 216,000.
Market movers
Shares in trade bellwether Deere & Co headed south after it warned of declining sales, with first-quarter revenues falling short of estimates.
Crocs surged on the back of solid FY25 profit guidance from the footwear manufacturer, following record 2024 numbers with revenues growing 4% to top $4bn.
Shares in Molson Coors jumped after fourth-quarter numbers at the American-Canadian brewer surpassed expectations. The firm said net sales fell 3% in the final three months of year to $2.74bn, ahead of the consensus forecast of $2.71bn.
Friday newspaper round-up: Barclays, BP, JPMorgan
The UK government will “wait and see” whether tariffs announced by Donald Trump “actually come to pass”, a senior minister said. The US president announced what he called “reciprocal tariffs” on all other countries on Thursday evening, claiming it was “fair to all”. But it was unclear how this would apply to the UK, especially as Trump suggested his policy regarded VAT as a tariff. – Guardian
The world’s electricity use will grow every year by more than the amount consumed annually by Japan because of a surge in electric transport, air conditioning and datacentres, according to the world’s energy watchdog. The International Energy Agency has raised its predictions for the world’s rising demand for electricity, pegging the growth at almost 4% a year until 2027, up from its previous forecast of 3.4% year. – Guardian
Barclays is under investigation for potentially breaking anti-money laundering rules in a fresh setback for the bank. On Thursday, the bank said the Financial Conduct Authority (FCA) was examining whether financial controls at its UK division had been too lax and if the lender had broken anti-money laundering laws. – Telegraph
The activist investor that has amassed a £4 billion position in BP is pushing for the British oil giant to emulate Shell’s strategy in cost-cutting and ditching green investments. The famously aggressive New York hedge fund Elliott Investment Management is understood to want Murray Auchincloss, BP’s chief executive, to follow the lead of Wael Sawan, his counterpart at Shell, who is leading a “ruthless” charge for higher returns and greater efficiency. – The Times
JP Morgan has run out of desks for its London staff despite ordering them back into the office five days a week. The US investment bank is trying to increase its desk space to accommodate all of its 14,000 London-based staff in Canary Wharf and the City. The return of JP Morgan employees back to their desks was triggered by the bank ending its flexible working arrangements, which previously allowed all staff, excluding senior management, to work from home three days a week, The Telegraph reported. – The Times
