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London open: Stocks fall on Trump’s tariff plans
London stocks fell in early trade on Tuesday after Donald Trump announced plans to impose tariffs against Canada, Mexico and China.
At 0850 GMT, the FTSE 100 was down 0.5% at 8,251.77.
Trump said that from 20 January, he will impose a 25% tariff on all goods coming from Mexico and Canada as he looks to clamp down on illegal immigration and drugs, and an additional 10% tariff on China.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said news of Trump’s tariffs “sent shockwaves through global sentiment”.
“The President-elect’s scorched-earth approach has stoked fears of a trade war, with investors increasingly wary that Europe could be next in his crosshairs,” he said. “The FTSE 100 is feeling the effects and, after a run of three sessions on the rise and posting its highest level in a month yesterday, opened 0.3% lower this morning.”
On home shores, the latest BRC-NielsenIQ Shop Price Index showed that shop prices in the UK continued to decline in November, but the rate of deflation slowed, signalling a potential shift in inflationary trends.
Prices fell 0.6% year-on-year during the first week of November, a slight increase from October’s 0.8% deflation and marginally above the three-month average of -0.7%.
Annual shop price growth remained at its lowest since September 2021.
“November was the first time in 17 months that shop price inflation has been higher than the previous month, albeit remaining overall in negative territory,” said British Retail Consortium chief executive Helen Dickinson.
“Food prices increased for fresh products such as seafood, which is more vulnerable to high import and processing costs, especially during winter.
“Tea prices also remained high as poor harvests in key producing regions continued to impact supply.”
In equity markets, Melrose Industries shot to the top of the FTSE 100 as JPMorgan Cazenove hiked its price target on the shares to 850p from 650p and opened a “positive catalyst watch” ahead of full-year results in March.
Intertek gained as the testing laboratories company upgraded annual guidance as it reported a 6.6% jump in like-for-like revenue for the four months to 30 October.
Electrical retailer AO World was in the back as it lifted full-year forecasts after a surge in interim earnings.
The company said it now expected adjusted profit before tax of £39m to £44m, compared with the previous range of £36m to £41m. Interim profits for the six months to 30 September rose 30% to £17m despite a tough summer hit by lower pricing and weak demand for cooling products.
On the downside, caterer Compass Group fell after full-year results, while Ithaca Energy was knocked lower by a downgrade to ‘hold’ at HSBC.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Melrose Industries Plc | +8.04% | +42.40 | 569.60 |
| 2 |  |
Intertek Group Plc | +1.24% | +56.00 | 4,568.00 |
| 3 |  |
Flutter Entertainment Plc | +1.05% | +230.00 | 22,060.00 |
| 4 |  |
Imperial Brands Plc | +0.86% | +22.00 | 2,586.00 |
| 5 |  |
Sage Group Plc | +0.69% | +9.00 | 1,304.00 |
| 6 |  |
Wpp Plc | +0.50% | +4.20 | 846.80 |
| 7 |  |
Tesco Plc | +0.45% | +1.60 | 353.80 |
| 8 |  |
Vodafone Group Plc | +0.45% | +0.32 | 71.40 |
| 9 |  |
Sainsbury (j) Plc | +0.39% | +1.00 | 254.20 |
| 10 |  |
Bt Group Plc | +0.39% | +0.60 | 155.55 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Wheaton Precious Metals Corp. | -3.02% | -150.00 | 4,810.00 |
| 2 |  |
Diageo Plc | -2.91% | -70.00 | 2,332.50 |
| 3 |  |
Bp 8%pf | -2.80% | -4.00 | 139.00 |
| 4 |  |
Compass Group Plc | -2.64% | -70.00 | 2,583.00 |
| 5 |  |
Aib Group Plc | -2.39% | -10.50 | 429.00 |
| 6 |  |
Prudential Plc | -1.77% | -11.60 | 645.20 |
| 7 |  |
Lloyds Banking Group Plc | -1.57% | -0.86 | 53.80 |
| 8 |  |
Bhp Group Limited | -1.53% | -32.00 | 2,054.00 |
| 9 |  |
Weir Group Plc | -1.53% | -34.00 | 2,184.00 |
| 10 |  |
Experian Plc | -1.43% | -55.00 | 3,779.00 |
Tuesday newspaper round-up: FCA, bookies, BDO
Britain’s financial sector watchdog is “incompetent at best, dishonest at worst”, according to a damning report by MPs and Lords which called for a big shake-up. An examination of the Financial Conduct Authority, which took almost three years and collected evidence from 175 fraud victims, whistleblowers and the regulator’s former staff, found “there are very significant shortcomings to the FCA”. – Guardian
Casinos and bookmakers in Great Britain will be forced to pay a £100m-a-year levy to fund research, education and treatment of gambling harms, under government plans to be announced as soon as this week. Labour is understood to be poised to rubber-stamp the previous government’s proposal to do away with a voluntary system that allows industry operators to choose how much to donate to tackle damage caused by gambling and which organisations should receive the money. – Guardian
A giant oil discovery in the Falkland Islands is even bigger than originally thought, it has emerged. An independent report into the North Falkland Basin has upgraded estimates of recoverable oil resources from 791m barrels to 917m – twice the annual output of the entire North Sea. Rockhopper Exploration, the company planning to drill in the field, said it planned to extract 532m barrels, up from a previous estimate of 312m. Most of the remainder could be recovered under further plans. – Telegraph
Partners at BDO have been given a 12 per cent pay rise after a record year for Britain’s fifth-largest audit firm, despite the industry regulator’s scathing review of its work. For the first time, BDO’s annual revenue surpassed £1 billion having turned over £1.02 billion in the 12 months to the end of June, almost 9 per cent more than the £935 million it posted in its previous financial year. – The Times
Lord Sugar’s commercial property business, which he runs with his two sons, swung back to a profit last year as the valuation of its portfolio began to stabilise in line with the wider market. The value of Amshold Limited’s buildings, which includes a Premier Inn hotel in Brentwood, Essex, and an Iceland supermarket in Leyton, east London, slipped a further £1.2 million between July 2023 and June this year to £85.7 million. – The Times
