- FTSE 100 down 102 points to 8,769
- US tariffs begin on Canada, Mexico and China
- EC proposes plan to mobilise €800bn of defence spending
- Results from Abrdn and Intertek impress, Greggs (LON:GRG) not so much
4.07pm: London exceptionalism
The FTSE 100 is the best performing stock market index in Europe and the US right now, as it is down a mere 1.2%.
France’s CAC is 1.8% lower, Spain’s IBEX has fallen 2.3% and both Germany’s and Italy’s benchmarks are down over 3%.
Across the Atlantic, the S&P 500 and Dow are both down more than 1.7%, while the Nasdaq has lost 1.6% as gains for Apple (NASDAQ:AAPL) and Alphabet (NASDAQ:GOOGL) offset losses for Microsoft (NASDAQ:MSFT), Nvidia (NASDAQ:NVDA), Amazonm, Meta, Broadcom (NASDAQ:AVGO) and Tesla.
"Global stock indices have taken their worst hit in years," says market analyst Axel Rudolph at IG, on the back of Trump’s tariff threat being made real.
The imposition of 25% tariffs on Canadian and Mexican imports and 20% on goods from China, which will retaliate with 15% tariffs on several US goods, has provoked the sharp falls in global stock indices, with Japan’s Nikkei another big faller.
Rudolph notes that the US dollar slid to a near four-month low and the Mexican Peso to a near three-year low, the US economic optimism index fell to a five-month low and US Treasury yields slid to an over four-month low as analysts price in three Fed rate cuts this year, the first of which in June.
But economists at Berenberg said the tariffs "will put upward pressure on inflation, preventing the Fed from cutting interest rates further".
If Trump follows through on his threats of reciprocal tariffs and imposes 25% levy on the EU on April 2, the cumulative impact of all the announced tariffs on core PCE inflation would exceed one percentage point.
"While the Fed remains somewhat confident that inflation will return to 2% in the near term, the newly announced tariffs, combined with rising inflation expectations, suggest this confidence may soon shift to concerns over inflation reacceleration."
2 day change -1,400 (always a tweet)[image or embed]
— Tom Hearden (@followtheh.bsky.social) March 4, 2025 at 4:19 PM
3.39am: FTSE down over 100 points
The FTSE 100 was down over 112 points a moment ago, a decline of over 1.2%.
Ashtead, the US focused construction equipment hire group, is the biggest faller, down 8.1%.
British Airways (LON:ICAG) owner IAG is down 6.3%, in synch with US airlines also in the red across the Atlantic. Easyjet (LON:EZJ) is down 4.8%, despite lower oil prices.
Tech investment trusts Scottish Mortgage and Polar Capital Tech are both not far behind, down over 5.3% both. Pershing Square (LON:PSHP) is down 4.5%, Alliance Witan PLC down 3.8%.
Financials are in firmly in the red too, with Barclays (LON:BARC) down 5.5% and St James (LON:SJP)’s Place down 4.9%, while housebuilders, miners.
Defence giant BAE Systems (LON:BAES), which has surged in recent weeks on the likelihood of increased defence spending, is down 3.5%.
On the leaderboard, excluding Intertek, on the back of its results, are defensive companies like food retailers like M&S and Tesco (LON:TSCO), utilities like Severn Trent (LON:SVT) and National Grid (LON:NG), drug companies GSK (LON:GSK) and AstraZeneca (LON:AZN), big tobacco BAT (LON:BATS) and Imperial. Consumer giants Unilever (LON:ULVR) and Coca-Cola (NYSE:KO) HBC are also in there.
3.10pm: US big retailers say tariffs mean prices will go up in matter of days
US stocks have opened in the red, with a second day of selling as Wall Street prices-in a reaction to the US tariffs.
The S&P 500 is down 1.5% as is the Nasdaq Composite, with the Dow Jones down 1.4% and the small cap Russell 2000 falling 1.9%.
Best Buy (NYSE:BBY) is the biggest faller on the S&P as it reports earnings and warned of continued pressure on consumers.
CEO Corie Barry said on the earnings call that prices will have to rise due to the tariffs, as China and Mexico were the firm’s two biggest suppliers.
The CEO of fellow retailer Target (NYSE:TGT) also told CNBC that American consumers "will likely see price increases over the next couple of days".
“If there’s a 25% tariff, those prices will go up."
2.05pm: Trump tariffs having ’negative economic impact’, even if reversed
Deutsche Bank (ETR:DBKGn)’s George Saravelos is back with his second comment of the afternoon, after warning earlier that Trump had triggered "the biggest shift in global trade relations since the collapse of Bretton Woods".
Now he says that up until today, "many Trump administration policies could be rationalized under the ’negotiating tactic’ mantra", which has been "at the core of the limited market reaction to developments throughout the year".
He acknowledged that some of the trade and foreign policy measures "may well get reversed in coming months, or even hours", but what is less debatable, in his view, "is the negative economic impact from the huge rise in uncertainty taking place in the US".
Applying a discount to these policies persisting in coming weeks is "reasonable" but the market "needs to start pricing policy that is not aligned with the administration prioritizing economic growth and the presence of an S&P 500 put".
And "the longer time goes by with no reversal, the more US and global growth downside we have to price in", he says.
1.33pm: Gold profit taking
The price of gold may "have gotten ahead of itself" after hitting yet another record last month, analysts at RBC have warned.
At $2,958 an ounce, spot gold hit its latest in a string of new highs in late February before receding back to $2,860 at the end of last week,
RBC noted the pullback was in line with expectations for "some sort of consolidation" and pointed to profit taking.
But gold is on the up again today, amid the trade war uncertainty, climbing to $2,924.6.
1pm: Saudi Aramco (TADAWUL:2222) slashes dividend
Saudi Aramco has slashed dividend payments after profit tumbled last year in line with weaker oil prices.
Net income dropped 12.4% from $121.3 billion to $106.2 billion over the course of 2024, Saudi Aramco reported on Tuesday.
This meant profit had dropped for a second consecutive year from a record in 2022, when benchmark Brent crude oil peaked at over $100 a barrel.
12.37pm: Massive global shift underway
At lunchtime on Tuesday, European stocks are firmly in retrenchment mode as US President Donald Trump’s tariffs threats became reality.
US stocks fell heavily overnight and are set to retreat further today.
London’s FTSE 100, down 0.6%, was the best performing market in Europe, with Germany’s DAX down 2.4% and France’s CAC index down 1.5%, while Italy’s and Spain’s benchmarks were down 2.8% and 2.3%.
Carmakers and other autos stocks were big fallers as tariff threats loomed large, with Stellantis (LON:0QXR), VW, Continental, Pirelli among leading fallers.
The US dollar index fell 0.7%, with the euro up 0.5% to $1.0544 and the pound up 0.3% to $1.274.
George Saravelos, global head of FX research at Deutsche Bank, says: "It is hard to over-estimate the scale of change taking place in global economic and geopolitical relations in a matter of days.
"Over the past twelve hours, President Trump has announced the suspension of military aid to Ukraine as well as 25% tariffs on Canada and Mexico, unravelling a trade agreement he signed just a few years ago.
"At the stroke of a pen, two pillars of America’s role in the world are being fundamentally challenged: the US’s security backstop for Europe and the respect of rules-based free trade."
Under the new rules, approximately half of total US imports are now subject to tariffs of more than 20% and the average US tariff rate is now above 10%, the highest since 1970.
Saravelos says his conclusion is that "this marks the biggest shift in global trade relations since the collapse of Bretton Woods", while the scale of threatened withdrawal from Europe "is so large, it is prompting the biggest shift in German fiscal stance since re-unification".
See the announcement of the €800 billion package on defence from the European Commission this morning.
"Yet despite all of the above, what stands out in today’s market reaction is that the dollar is not strengthening materially," the analyst said.
He says there is "no question" that a recession in Canada and Mexico is now likely if these tariffs persist, with global growth risks "rising sharply" and "no question" that the geopolitical backdrop in Europe is more precarious than it was a month ago.
"Yet why is the dollar weakening? There are times to be dismissive of the market reaction, but not today."
He even mentions the "potential loss of the dollar’s safe-haven status" amid a speed and scale of global shifts "so rapid that this needs to be acknowledged as a possibility".
11.44am: Intertek and Fresnillo top leaderboard
Topping the risers this morning among London’s blue-chips is product certification and testing group Intertek Group PLC (LSE:LON:ITRK) on the back of an upbeat set of results and new targets for higher profits margins.
A £350 million share buyback programme has helped the shares to a 7% gain this morning.
Fresnillo is up 3.5% after the Mexican miner announced a special dividend as gold and silver prices shine.
Mark Crouch, market analyst at eToro, says: "Fresnillo has posted a strong set of results for 2024, the precious metals miner saw revenue jump markedly, and despite elevated production costs, increasing demand for precious metals pushed Fresnillo’s gross profits to more than double that of the previous year."
With silver prices reaching a twelve-year high in October, and gold making new highs on what feels like a monthly basis, he said Fresnillo shares have largely under-performed the metals’ spot prices.
"Even now, shares of the worlds largest silver mining company are trading at levels historically associated with much lower gold and silver prices, and while this could present an opportunity for investors, bad weather, price volatility and currency fluctuations all represent potential pitfalls for Fresnillo."
11.31am: Small cap stories
Johnson Service Group shares have jumped 12% after the textile services company reaffirmed its target for margin expansion in 2025 and 2026.
Westminster Group soared 31% after signing a 15-year contract to provide security services at our airports in Gabon, including three international airports and one domestic airport, which is expected to generate $5.5 million in the first 12 months.
After a suspension that lasted for around two years, Savannah Energy has returned to trading on AIM, announcing a £30.6 million fundraise and a trading update, among other things.
Other fundraising were completed, with Vela Technologies announced plans to raise £1.1 million, make management changes and change its name to Caledonian Holdings, and Nostra Terra Oil and Gas completing a £500,000 fundraise to support ongoing operations in East Texas.
Team Internet Group said it was confident in its "fundamental prospects and business" as would-be buyer Verdane confirmed it would not be formally bidding for the group, with the company saying demand for its services is at an all-time high.
Elsewhere, Union Jack (LON:UJO) Oil reported positive well testing results from the Moccasin 1-13 well, in Oklahoma, where it saw rates of up to 621 barrels of oil per day.
10.50am: China tariff retaliation
China has begun to fire out retaliatory tariffs in response to those levied by the USA today.
The People’s Republic has imposed extra tariffs of 10-15% on various US farm products, halting imports of US logs and suspending imports of soybeans from three US companies and placing 25 US firms under export and investment restrictions.
Imports of Illumina Inc (NASDAQ:ILMN) gene sequencers were reportedly also banned, among individual measures taken.
Kathleen Brooks, research director at XTB, noted that Chinese shares initially fell sharply before flattening off, while Germany’s DAX fell heavily as automobile stocks led the decliners.
The UK’s FTSE 100 was one of the most resilient indices in Europe, partly because of its defensive make up, and partly because the UK remains tariff free so far, though the energy sector was a weak link as oil prices tumble to their lowest levels since October.
"Unsurprisingly, Shell is one of the biggest decliners on the FTSE 100 today, while miners are also lagging, including Rio Tinto (LON:RIO) and Anglo American (LON:AAL).
"This is not a day for stocks that are leveraged to the global economy, including miners and materials sectors. Instead, healthcare stocks and defence firms are leading the UK index."
10.25am: €800bn of EU defence spending to be unlocked
Another European Union story: Ursula von der Leyen, the European Commission president, has proposed a €150 billion “Rearm Europe” plan to increase military spending across the bloc to around €800 billion.
In a speech, she said EU countries should be allowed to access these loans as part of a comprehensive five-part strategy to enhance defence budgets, according to media reports.
The plan aims to facilitate up to €800 billion in additional defence expenditures over the coming years, the report said.
10.19am: EU unemployment
Euro-zone unemployment in January remained unchanged at its record low of 6.2% for a fourth consecutive month.
The previous few months were also revised down slightly.
Other data show that labour demand is weakening, said economist Ankita Amajuri at Capital Economics. "With the economy growing very slowly, we expect unemployment to creep up over the coming quarters.
"While the low unemployment rate suggests that the labour market remains tight, there are other signs that firms’ demand for workers is softening."
9.40am: Prada acquiring Versace ’makes sense’
Milan-based Prada has agreed to pay £1.2 billion to buy Versace from US-based Capri Holdings, which also owns Jimmy Choo and Michael Kors (NYSE:CPRI).
"Prada acquiring major industry peer, Versace, makes sense both financially and strategically," says Jelena Sokolova, senior equity analyst at Morningstar.
"Prada’s profitability and cash position has been strengthened in recent years, helped by strong brand momentum. Most brands go through fashion cycles and ownership of several brands with very different aesthetics, as we can see with Versace’s maximalist style contrasting Prada and Miu Miu’s minimalist.
"By acquiring businesses of different character, brands can help protect themselves and smooth the cyclicality of performance. Prada has a strong track record of running luxury brands that Versace’s current owner Capri Holdings lacks in comparison."
9.29am: European stocks down sharply
The Footsie has retreated from the record highs set at the start of the week this morning, with oil giants, airlines, miners, tech and banks all heading lower.
But the 0.3% decline for the London index is less than the losses on the continent, with Germany’s DAX down 2% and France’s CAC and Spain’s IBEX down 1.3% and 1.7%.
Europe is "taking direction from Wall Street", where the session overnight saw stocks have their worst day of the year so far, says Derren Nathan, head of equity research at Hargreaves Lansdown (LON:HRGV).
The spark for the sell-off was the US going ahead and imposing a blanket 25% border tax on all imports from neighbouring Canada and Mexico, with those north of the border immediately hitting back already with a 25% charge on $30 billion of US imports and more wide-ranging reciprocal action planned for the end of the month.
Looking at the BRC shop price data, he said National Insurance and minimum wage increases around the corner points to more upward pressure ahead, and "won’t be helped by the escalation in trade tensions".
UK gilt yields have come back a little from recent peaks but "remain stubbornly high" and have edged up again today, Nathan notes.
A positive for the inflationary narrative is that oil prices are retreating, with Brent crude now priced at under $71 per barrel as both supply and demand dynamics exert downward pressure.
OPEC also unexpectedly announced that it will re-open the taps on 2.2 million barrels of daily oil production from 1 April.
9.06am: E’s are good?
Abrdn PLC (LSE:ABDN) shares jumped 13% as the fund management and wealth group has impressed investors with its results and news that it is bringing back two fondly remembered letter-Es into its name.
The company’s name will be changed to Aberdeen Group, after dropping its vowels back in 2021 from former moniker Aberdeen Standard Life (LON:ABDN).
Results were "a touch ahead of estimates", says analyst Rae Maile at Panmure Liberum, hailing the "new, sensible name".
He adds: "The market has not believed before in the potential, that will be a harder position to hold today."
Another riser is Keller Group (LON:KLR) PLC, also up 13% after the geotechnical specialist posted results ahead of expectations and unveiled a record £1.6 billion order book.
8.45am: UK shop prices remain in deflation
UK retail shop prices rose 0.4% in February compared to January levels, though were lower than they were a year ago, according to the British Retail Consortium and NielsenIQ.
This was the biggest month-on-month spike in a year, though annual shop price inflation remained down 0.7% in February as it was in January.
The BRC expects food prices to be over 4% up by the second half of the year.
BRC chief exec Helen Dickinson says: "While shop prices remained in deflation in February, prices on the month saw the biggest increase in the last year."
She highlights breakfast items getting more expensive: butter, cheese, eggs, bread and cereals prices all hiked, with climbing global coffee prices threatening to push the morning costs higher in the coming months.
"In non-food, month on month prices rose as January Sales promotions ended, especially in electricals and furniture. But discounting is still widespread in fashion as retailers tried to entice customers against a backdrop of weak demand."
8.26am: Greggs tumbles
Shares in Greggs PLC (LSE:GRG) are down almost 10% on the back of its results, which showed sales growth cooling further.
Analyst Ben Hunt at Panmure Liberum said PBT was "a touch ahead" of expectations, which appears to be a function of lower interest costs and a stronger than expected gross margin performance.
He noted that full-year gross margins increased 100bps, implying a stronger second half following price hikes to recover cost inflation and after the first half was impacted by an extension of the delivery partnership with Uber (NYSE:UBER) Eats that ended a previously exclusive agreement with Just Eat.
With LFL sales growth slowing to 1.7% in the first nine weeks of the year year, following 2.5% growth in Q4 last year, the Hunt said this suggested volumes are "likely even more negative than they were in Q4 given recent price hikes".
8.14am: FTSE hit by commodities and tech selling
The FTSE 100 tumbled 61 points in initial trading as BP PLC (LSE:NYSE:BP (LON:BP).) and Shell PLC (LSE:LON:SHEL, NYSE:SHEL) fell on the back of lower oil prices, down 4% and 3.3% respecitvely.
Tech investors Scottish Mortgage Investment Trust PLC (LSE:LON:SMT) and Polar Capital Technology Trust PLC (LSE:LON:PCT) also was among the fallers after the Nasdaq sell-off overnight.
Miners were dragging too, with Anlgo American, Antofagasta (LON:ANTO) and Glencore (LON:GLEN) all down at least 2%.
7.58am: Abrdn profit returns to growth
Abrdn PLC reported the first profit growth in three years and set out a strategy tweak as it looks to become a leading wealth and investments group.
For the past calendar year, the fund manager and owner of the Interactive Investor platform reported £1.3 billion of net revenue, down 6% on the previous year, and an adjusted operating profit of £255 million, up 2% year-on-year.
The total annual dividend was maintained at 14.6p per share.
CEO Jason Windsor said: “Alongside our results, we are setting out our strategy to become a leading Wealth & Investments group, with new 2026 targets that underline the potential for the profitable growth we see in all of our businesses. Together with active capital management - and by further lowering restructuring spend - we are able to maintain the historic dividend per share from materially higher, and sustainable capital generation.”
7.43am: Direct Line reports strong numbers
Direct Line Insurance Group PLC (LON:DLGD) (LSE:DLG), which agreed in December to be taken over by Aviva (LON:AV), has also announced results, with strong growth and a turnaround in motor profitability, alongside solid non-motor business too.
CEO Adam Winslow says the turnround strategy launched last July "has made a marked difference to the company’s performance, and we have good momentum across all our business lines".
With a pre-final dividend solvency ratio of 200%, the board has recommended a final dividend of 5p per share.
Shareholders are set to vote on the £3.7 billion takeover next Monday, 10 March, and if regulatory clearances are achieved without a hitch the deal is expected to become effective by the middle of the year.
7.31am: Greggs sales cool further
Greggs PLC has reported a further slowing in sales growth in the early weeks of 2025, but said it was confident it can “manage inflationary headwinds” and deliver progress.
Like-for-like sales were up 1.7% year-on-year in the first nine weeks of 2025, with the baker blaming weather conditions in January, but it said trading had improved in February.
In comments alongside 2024 preliminary results, chief executive Roisin Currie said the company’s sales remain “on track” to meet the target set three years ago to double sales by 2026, “and we continue to be confident in the growth opportunity in front of us”.
7.13am: FTSE heading lower
The FTSE 100 has been called down sharply ahead of Tuesday’s open, following fairly heavy selling overnight on Wall Street.
London’s blue-chip index was down 46 points on the futures market, having yesterday added almost 62 points to finish at 8,871.3.
Overnight, the S&P 500 sank 1.8% as the tech-heavy Nasdaq plunged 2.6% and the Dow Jones retreated 1.5%.
Nvidia shares plummeted over 7% due to an investigation, while there were reports that Chinese buyers were circumventing US export controls to get hold of its latest chips.
Asian markets are mixed, with the Nikkei down 1.2% but China’s indices slightly in the green.
"Today marks a turning point in Donald Trump’s tariff policy," says market analyst Ipek Ozkardeskaya at Swissquote Bank. "It is the day the tariff threat will materialize – unless there is a surprise U-turn – and hammer hopes that the aggressive tariff threats were not just a negotiation tactic."
"Hence, markets are nervous since yesterday."
5am: What to watch for on Tuesday
A packed Tuesday will feature updates from the likes of Abrdn, Flutter and Greggs.
Abrdn has already signalled a net inflow for the final quarter... Read more
Flutter revealed a hit due to unfavourable sports results recently... Read more
Greggs’ update comes after warnings over headwinds ahead... Read more
Announcements due:
Trading updates: Ashtead Group (LON:AHT) PLC
Interims: Pci-Pal PLC, Origin Enterprises PLC
Finals: Abrdn PLC, Apax (HN:IBC) Global Alpha Ltd, Bakkavor Group PLC, Beazley PLC (LON:BEZG), Blackbird, Flutter Entertainment PLC (LON:FLTRF), Fresnillo PLC (LON:FRES), Greggs PLC, Inchcape PLC (LON:INCH), International Workplace Group PLC, Intertek Group PLC, Johnson Service Group PLC, Keller Group, Kitwave Group Ltd, Oxford Nanopore Technologies PLC (LON:ONT), Reach PLC (LON:RCH), Spirent Communications (LON:SPT) PLC, Synectics PLC, TT Electronics PLC (LON:TTG), Weir Group PLC (OTC:WEGRY)
US earnings: NIO, CrowdStrike (NASDAQ:CRWD) Holdings
AGMs: Watkin Jones PLC (LON:WJG)
Economic announcements: Redbook Index (US)