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FTSE 100 stocks in the UK were weaker on Wednesday despite news that US and Chinese officials would meet at the weekend to de-escalate the trade war and Beijing announced new policy stimulus.
Beijing struck a harsh tone nonetheless, warnings against what it said might even be an “attempt to continue to coerce and blackmail under the guise of talks”.
Hence, perhaps, the muted reaction by Asian bourses, as initial gains quickly dissipated.
In the UK, as of 0820 GMT, the FTSE 100 was slipping by 0.30% or 25.85 points to 8,570.36.
In parallel, the S&P 500 mini futures contract was trading up by 29.0 points at 5,654.75.
June gold futures on COMEX were off by 0.85% at $3,393.60/oz..
“Just hours after Beijing finally caved—admitting it had been quietly engaging in pre-trade talks with the U.S. despite days of denials and diplomatic gaslighting—it dropped the mask and the rates,” said Stephen Innes, managing partner at SPI Asset Management.
“The timing was no accident. This wasn’t policy—it was a confession, camouflaged as a monetary tweak to steady the ship and project negotiating strength ahead of face-to-face talks with Washington. A facade of leverage, nothing more.”
The People’s Bank of China cut lenders’ reserve requirement ratio by 50 basis points, while its seven-day reverse repo rate was reduced to 1.4%.
Innes was dismissive of those new moves, emphasising that China was facing a lack of demand so the new moves might not be very effective.
“Beijing is throwing liquidity at the wall, hoping something sticks,” he said.
Further dampening the mood, overnight Indian jet fighters struck what New Delhi described as terrorist training camps inside Pakistan.
Both countries had reportedly since signalled their desire not to escalate.
Still ahead for later in the day, rate-setters in the US were due to meet after the close of London markets.
No change in rates was anticipated, but investors were keen for any hints that rate cuts might be forthcoming in the third quarter.
Defence engineer BAE reports in line trading
BAE Systems said in an update on Wednesday that trading year-to-date was in line with management expectations and reaffirmed its full-year guidance. The FTSE 100 defence specialist noted a strong order backlog and robust pipeline, providing visibility and underpinning long-term growth. It also noted continued investment to support expansion and stated it is well positioned to benefit from increased defence spending.
Online rail ticketing platform Trainline on Wednesday reported a sharp rise in adjusted core earnings on the back of a 12% jump in sales. Adjusted EBITDA rose 30% to £159m, while operating profit surged by 54% to £86m. Group net ticket sales came in at £5.9bn.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Aib Group Plc | +3.14% | +16.00 | 526.00 |
| 2 |  |
Glencore Plc | +2.12% | +5.25 | 253.00 |
| 3 |  |
International Consolidated Airlines Group S.a. | +1.99% | +5.60 | 287.20 |
| 4 |  |
Prudential Plc | +1.79% | +14.60 | 829.60 |
| 5 |  |
Smurfit Westrock Plc | +1.73% | +51.00 | 3,004.00 |
| 6 |  |
Diageo Plc | +1.58% | +34.00 | 2,190.00 |
| 7 |  |
Banco Santander S.a. | +1.31% | +7.00 | 541.00 |
| 8 |  |
Rio Tinto Plc | +1.25% | +56.00 | 4,534.50 |
| 9 |  |
Pershing Square Holdings Ltd | +1.22% | +44.00 | 3,646.00 |
| 10 |  |
Imperial Brands Plc | +1.19% | +37.00 | 3,158.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Gresham House Renewable Energy Vct 1 Plc | -5.71% | -2.00 | 33.00 |
| 2 |  |
Gsk Plc | -4.00% | -58.00 | 1,392.00 |
| 3 |  |
Bt Group Plc | -3.51% | -5.95 | 163.45 |
| 4 |  |
Vodafone Group Plc | -2.22% | -1.62 | 71.36 |
| 5 |  |
Next Plc | -1.81% | -225.00 | 12,225.00 |
| 6 |  |
Segro Plc | -1.71% | -11.80 | 676.60 |
| 7 |  |
Astrazeneca Plc | -1.63% | -174.00 | 10,526.00 |
| 8 |  |
Associated British Foods Plc | -1.51% | -30.50 | 1,989.50 |
| 9 |  |
Rightmove Plc | -1.31% | -9.80 | 739.80 |
| 10 |  |
Sse Plc | -1.17% | -20.00 | 1,692.00 |
US close: Stocks fall for second day on tariff fears, Fed caution
US stock markets continued their retreat on Tuesday as investors digested a number of gloomy outlooks from corporations warning of the negative impact from trade tariffs on business.
“US markets remained on track for their second straight day of falling share prices. The lingering threat of new tariffs being imposed by President Trump led to a rise in the gold price on safe haven flows and an outflow of US stocks into Asian and European indices,” said Axel Rudolph, senior technical analyst at IG.
The Dow dropped 1.0%, the S&P 500 fell 0.8% while the Nasdaq slipped 0.9%.
The S&P 500 in particular was down for the second day after settling at 5,686.67 on Friday – its highest close since 27 March.
Investors continued to react to newsflow regarding potential trade talks. Reports that the White House was nearing a deal with India were in focus after the South Asian nation proposed zero tariffs on steel, auto components and pharmaceuticals on a reciprocal basis, up to a certain amount of imports.
Meanwhile, Donald Trump met with new Canadian prime minister Mark Carney, who pushed back at the president’s ongoing assertion that Canada should become the 51st state. “Having met with the owners of Canada over the course of the campaign the last several months, it’s not for sale. It won’t be for sale, ever,” Carney said.
All eyes were also firmly focused on the Fed early on Tuesday as the central bank begins its two-day policy meeting. While policymakers are widely expected to keep rates unchanged, investors are hoping to gain more insight into the Fed’s outlook at its first meeting since Trump announced his “reciprocal” tariffs at the start of April. Fed funds futures suggest just a 2.7% chance of the central bank cutting rates.
“We expect [chair Jerome] Powell’s recent policy guidance suggesting patience to be reiterated given economic conditions have not shifted in a material way despite looming tariffs,” said analysts at TD Securities.
On the macro front, the US trade deficit widened to a fresh record high of $140.5bn in March, according to the Bureau of Economic Analysis, wider than forecasts of $137.0bn. Imports jumped 4.4% to an all-time high of $419.0bn, while exports were up just 0.2%.
Market movers
Cereal maker WK Kellogg finished more or less flat after delivering a gloomy outlook to the market. The company lowered its sales and profit forecasts for 2025, citing a weaker-than-expected first quarter and a “modest impact” from trade tariffs.
In recent days, a number of household names, from Ford to Mattel, have lowered or suspended their guidance for the current year as they continue to calculate how tariffs will affect demand and bottom lines.
Nevertheless, Ford finished the day firmly higher – despite warning of “near-term risks” – after first-quarter results beat market forecasts.
Marriott also managed to top estimates with quarterly results, but lowered its RevPAR guidance for the full year due to macro uncertainty.
Online food delivery company DoorDash dropped sharply after posting first-quarter revenues and orders that fell short of expectations. The company also announced it would be dropping more than $5bn in separate deals to buy UK rival Deliveroo and booking platform SevenRooms.
Wednesday newspaper round-up: Tesla sales, Trump trade war, mortgages, Kingsmill-Hovis merger
Elon Musk’s Tesla sold just over 500 vehicles in Britain in April, down by more than half on the previous month, as motorists shifted decisively away from all-electric vehicles in favour of plug-in hybrids. According to the latest registration figures, the big government push to get drivers into all-electric cars appears to have stalled seemingly in favour of the plug-in hybrids, internal combustion engine vehicles which can run for a few dozen miles on a rechargeable electric battery. – The Times
Tens of thousands of British workers will be forced to delay retirement or even go back to work because of the market turmoil triggered by Donald Trump’s trade war, experts have warned. The Society of Pension Professionals (SPP), which includes Aviva and Legal & General among its members, said savers’ pension pots faced a hit of up to 20pc after the US president announced new import taxes on goods from almost every country on April 2. – Telegraph
A one-of-a-kind mortgage offering a major financial perk – no repayments for the first three months – has been launched in the UK. The deal, unveiled by Skipton Building Society, is the latest innovation aimed at cash-strapped first-time buyers and is designed to provide them with a bit of breathing space as they settle into their new property. – Guardian
The owner of Kingsmill has confirmed it is considering a merger of its bread business with Hovis as the baking industry struggles against a backlash to processed foods and the growing adoption of low-carb diets. Associated British Foods, which also owns Ryvita and Primark, said it was in discussions with Endless, the private equity firm, about combining Hovis and Allied Bakeries, the bread business which includes Kingsmill. – The Times
TalkTalk has been hit by an exodus of customers as the struggling broadband business loses ground to rivals. The telecoms group, which is owned by billionaire Sir Charles Dunstone, saw its customer base fall by more than 400,000 to 3.2m in the year to February. It comes amid heavy cost-cutting at TalkTalk, which narrowly avoided collapse last year after securing an emergency cash injection from Sir Charles and other shareholders. – Telegraph
China has vowed to “safeguard international fairness and justice” in upcoming talks with the United States in Switzerland, the first meeting between the two countries to discuss trade war that has roiled the global economy since US president Donald Trump unveiled sweeping tariffs last month. China’s vice-premier He Lifeng will meet US treasury secretary Scott Bessent on the sidelines of meetings in Switzerland between 9 and 12 May. US trade representative Jamieson Greer will also attend. – Guardian
