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London open: Stocks edge up as investors mull fresh Trump tariffs
London stocks edged higher in early trade on Monday as investors reacted calmly to US President Donald Trump’s latest tariff announcement over the weekend.
At 0820 GMT, the FTSE 100 was up 0.2% at 8,718.16.
Kathleen Brooks, research director at XTB, said: “As we start a new week, there are another round of tariffs for markets to price in. Trump has announced plans to slap 25% tariffs on imports of steel and aluminium from Monday, at the same time as China will place tariffs on $14bn of US goods, in retaliation for the US’s 10% flat tariff on all Chinese imports.
“While $14bn in trade terms is fairly small, the symbolism will have more impact on market sentiment. It highlights the fact that China and the US could not agree on a plan to move forward without tariffs, and essentially starts a new trade war between the two largest global economies.
“Hopes that the US could roll back on tariffs like it did with Mexico and Canada were dashed, and the new measures from China will also include export restrictions for rare earth minerals, which are vital to produce smart phones, some chips, batteries and infrastructure for renewable technology, which could weigh on tech stocks at the start of this week.”
In equity markets, BP surged to the top of the FTSE 100 following a Bloomberg report over the weekend that activist investor Elliott Investment Management has built a “significant” stake in the oil giant.
Brooks said: “This is not the first time that an activist investor has targeted BP, Bluebell Capital Partners started to get vocal about BP’s under performance last year, and it also called for heads to roll, including the chairman. Like Bluebell, Elliott also wants BP to ditch its plans to reduce its fossil fuel reduction plans.
“The difference this time is that Elliott is better known than Bluebell and has a track record of forcing through the corporate changes that it wants. We don’t know how big its stake is, or exactly what its plans are for BP: will it try to break the company up, or could it try to force a sale of the company? BP’s shares have risen by 10% so far this year, although they remain well below the highs from last April.”
Brooks added: “We do not think that Elliott has enough of a stake in BP yet to force a sale of the company, however, if there was a firm offer on the table for BP in the coming weeks, then the stock price could take off, in our view.”
Kosmos Energy gained as it said that the first liquified natural gas production has been achieved at the BP-operated Greater Tortue Ahmeyim project, offshore Mauritania & Senegal.
Chemicals group Johnson Matthey was in the black as it announced that its chair of seven years Patrick Thomas will step down later this year, while its chief financial officer of four years will be replaced by the head of finance at DS Smith.
In broker note action, Spectris rose after an upgrade to ‘overweight’ at JPMorgan but BA and Iberia owner IAG flew lower after a downgrade to ‘neutral’ at Goldman Sachs.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Bp Plc | +6.22% | +26.95 | 460.20 |
| 2 |  |
Centrica Plc | +1.90% | +2.60 | 139.10 |
| 3 |  |
Fresnillo | +1.76% | +13.50 | 778.50 |
| 4 |  |
Bp 8%pf | +1.53% | +2.00 | 133.00 |
| 5 |  |
Intermediate Capital Group Plc | +1.29% | +30.00 | 2,348.00 |
| 6 |  |
Ashtead Group Plc | +1.23% | +61.00 | 5,040.00 |
| 7 |  |
Vodafone Group Plc | +1.16% | +0.80 | 69.74 |
| 8 |  |
Lloyds Banking Group Plc | +1.05% | +0.66 | 63.22 |
| 9 |  |
Haleon | +0.98% | +3.70 | 383.10 |
| 10 |  |
3i Group Plc | +0.95% | +38.00 | 4,039.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
South32 Limited | -3.56% | -6.40 | 173.60 |
| 2 |  |
International Consolidated Airlines Group S.a. | -1.72% | -6.30 | 360.00 |
| 3 |  |
Bae Systems Plc | -1.67% | -20.00 | 1,177.00 |
| 4 |  |
Banco Santander S.a. | -1.51% | -7.00 | 458.00 |
| 5 |  |
Sse Plc | -0.99% | -15.50 | 1,544.50 |
| 6 |  |
Ferguson Enterprises Inc. | -0.69% | -100.00 | 14,330.00 |
| 7 |  |
Coca-cola Hbc Ag | -0.66% | -20.00 | 3,016.00 |
| 8 |  |
Shell Plc | -0.64% | -17.00 | 2,628.00 |
| 9 |  |
Crh Plc | -0.50% | -42.00 | 8,318.00 |
| 10 |  |
Rio Tinto Plc | -0.45% | -22.50 | 4,992.50 |
US close: Stocks sink as trade war concerns intensify
US stocks fell sharply on Friday as investors digested a mixed January employment report amid an escalation of concerns about a trade war following comments from Donald Trump.
While the market reaction to the jobs data was marginal, stocks sank in afternoon trade after Trump he said that the government would impose retaliatory trade tariffs on countries that charge additional duties on US imports. The measures would begin as early as Monday or Tuesday, he said, but didn’t specify which countries would be affected.
“That headline hit the tape like a lead balloon, forcing traders to hit the brakes on risk sentiment. Stocks took a sharp turn lower, erasing earlier gains as markets braced for another round of trade war drama,” said Stephen Innes, managing partner at SPI Asset Management.
The S&P 500 and Dow finished 1% lower, while the Nasdaq dropped 1.4%.
According to the US Department of Labor, seasonally adjusted non-farm payrolls grew 143,000 in January, well below the 170,000 expected by the market and the revised gain of 307,000 for December. However, November and December’s tallies for payrolls combined were marked up by 100,000.
Average hourly earnings grew by 0.5%, coming in noticeably ahead of economists of forecasts (consensus: 0.3%), while the unemployment rate ticked 10 basis points lower to 4.0%.
“January’s strong US employment report supports our view that the Fed will stay on the sidelines during the rest of 2025, as well as our forecast that the 10-year Treasury yield will end the year higher,” said Joe Maher, assistant economist at Capital Economics.
Analysts at ING chipped in, adding: “There are still lingering concerns about the quality of jobs being added, but an improving trend in jobs creation since late summer means the Fed will hold rates until 3Q.”
Elsewhere on the macro front, US wholesale inventories decreased 0.50% month-on-month in December, while the University of Michigan’s consumer sentiment index dropped to 67.8 in January from 71.1.
Amazon disappoints
Shares in Amazon came under pressure on Friday after fourth-quarter numbers from the US tech giant underwhelmed. Net sales jumped 10% to $187.8bn, fuelled by a bumper holiday shopping season, while operating income rose to $21.2bn from $13.2bn year-on-year. However, sales in its cloud division, Amazon Web Services, disappointed, while estimates for the first quarter also failed to meet analyst expectations, causing the stock to sink 4%.
Heading the other way was travel technology group Expedia, surging 17% after announcing that Q4 profits and revenues had grown thanks to increased bookings across segments.
Trending cosmetics firm E.l.f. Beauty dropped 20% after lowering its outlook for the full year and reporting third-quarter profits that missed forecasts.
Social media picture-sharing platform Pinterest jumped 19% after posting strong revenue growth in the fourth quarter, helped by a double-digit gain in monthly active users.
Monday newspaper round-up: Service charge, BP, Heathrow, Elon Musk
An increasingly complex tax system is burdening the government and businesses with hundreds of millions of pounds more in administration costs, Whitehall’s spending watchdog has warned. The report by the National Audit Office (NAO) also said “poor levels of service” meant some taxpayers and their representatives were “finding it more difficult to deal with their tax matters and are losing trust in HM Revenue & Customs [HMRC]”. – Guardian
The average annual service charge for a leasehold flat in England and Wales has jumped by an inflation-busting 11% to £2,300, according to data. The increase – the biggest for at least eight years – means that for many their service charge is their largest household bill after their mortgage, and may fuel fresh calls for the government to accelerate an overhaul of the scandal-hit leasehold sector. – Guardian
BP has been targeted by activist investor Elliott as the oil giant struggles to work out its approach to net zero and better-performing US rivals prepare for an industry boom under Donald Trump. Elliott Investment Management has built up a stake in the British oil major, according to reports. The fearsome hedge fund has a reputation for agitating for strategic change at companies it invests in, or lobbying for either a break-up or disposals. – Telegraph
Airlines that fly from Heathrow have called on the aviation regulator to conduct an “urgent and fundamental review” of the airport amid fears that they face a jump in costs to finance a multibillion-pound third runway. In a sign of the obstacles in the way of expanding Britain’s biggest airport, the bosses of the owner of British Airways, International Airlines Group, and Virgin Atlantic have urged the Civil Aviation Authority to start a sweeping reappraisal of Heathrow to address “spiralling costs” at the hub. – The Times
Elon Musk has quashed rumours that he might buy TikTok, the Chinese-owned video-sharing app that US is trying to ban on national security grounds. There had been speculation that the world’s richest man could combine the American operations of TikTok with X, which was previously called Twitter and was bought by Musk for $44 billion in 2022. Yet in his first public comments on the rumours, Musk denied any interest in a deal. – The Times
