Stocks in Europe remained in the red on Tuesday afternoon after a plan by incoming US president Donald Trump to impose tariffs on China, Canada on Mexico on day one in office put investors on edge.
The FTSE 100 index lost 18.02 points, 0.2%, at 8,273.66. The FTSE 250 slipped 117.93 points, 0.6%, at 20,631.33, and the AIM All-Share declined 2.02 points, 0.3%, at 731.51.
The Cboe UK 100 was down 0.2% at 832.04, the Cboe UK 250 lost 0.7% at 18,113.52, and the Cboe Small Companies was down 0.1% at 15,661.69.
The CAC 40 in Paris lost 0.4%, and the DAX 40 in Frankfurt fell 0.5%.
In New York, the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite are all called up 0.1%.
The pound was quoted at $1.2583 early Tuesday, rising from $1.2559 at the time of the London equities close on Monday. The euro stood at $1.0518, climbing from $1.0488. Against the yen, the dollar was trading at JP¥153.75, falling from JP¥154.37.
Stocks had advanced and the dollar lost some ground on Monday, after Donald Trump named Scott Bessent as the next US Treasury secretary, a move that was deemed market-friendly.
‘The week started on a calm note with the nomination of Scott Bessent as US Treasury secretary, a hedge fund manager seen as a safe pair of hands and someone who might rein in Donald Trump‘s more aggressive ideas, such as toning down tariffs,’ AJ Bell analyst Dan Coatsworth commented.
‘Trump was clearly having none of that, given he immediately took to social media to promise bigger than expected 25% tariffs on all products supplied from Mexico and Canada into the US, and a further 10% for Chinese goods, all on day one of his new presidency. That took the market by surprise.’
There was some early advancers on the FTSE 100, including aerospace firm Melrose’s 5.8% rise after JPMorgan placed it on ’positive catalyst watch’, though stocks largely fell in the wake of Trump’s announcements.
Among those to decline were Asia-focused insurer Prudential, down 1.5%, and miner Glencore, falling 1.2%. Miners have heavily-exposed to the Chinese economy as it is a major buyer of minerals.
Elsewhere in London, Compass Group reversed early weakness to trade 3.1% higher.
In the year to September 30, pretax profit amounted to $2.06 billion, a decline of 3.8% from $2.14 billion. Revenue, however, rose 11% to $42.00 billion from $37.91 billion.
Organic revenue rose 11%, beating the company-compiled consensus prediction of 10% growth.
Halfords rose 12%. The cycling and motoring products retailer said pretax profit from continuing operations in the first half to September 27 fell 23% to £17.8 million from £23.2 million a year prior. Revenue from continuing operations slipped 0.1% to £864.8 million from £865.3 million. However, Halfords said it remains ‘comfortable with consensus estimates for FY25’.
‘The second half of the year will be impacted by incremental freight at the lower end of the previously indicated £4-7 million range, and acceleration of our Fusion rollout will have a [roughly] £1 million impact due to temporary garage closures,’ it added.
The firm said measures announced in the UK budget will add £23 million of direct labour costs, of which £9 million was already included in its ‘planning assumptions’ for the next financial year.
‘The effect of the UK budget on consumer behaviour and hence the trajectory of our end-markets is unclear. We have a greater ability to mitigate headwinds in the more needs-based Autocentres servicing business, where pricing power is greater. Additional tactical and structural options to support mitigation are under review,’ Halfords continued.
Severfield slumped 36%. The structural steel maker expects annual profit to be below previous expectations as a ‘recovery in some sectors has been slower than expected’. It also noted ‘tighter prices are continuing to impact our profitability in the short-term’. In addition, some potential ‘large project’ work for the current year and the next have been delayed or cancelled.
In the half-year to September 28, revenue increased17% to £252.3 million from £215.3 million. However, Severfield swung to a pretax loss of £5.8 million from profit of £11.0 million. Operating costs spiked 26% to £256.9 million from £203.3 million.
Results also included a ‘non-underlying cost of £20.4 million’ for a ‘bridge remedial works programme’. The figure excludes potential recoveries from third parties‘ and Severfield said its ’assessment of any further remedial costs remains ongoing‘.
‘The group identified some bridge structures which were not in compliance with the client’s weld specification requirements, predominantly relating to twelve bridge projects that are either ongoing or were completed over the past four years. The issues all arise out of a particular bridge specification and related sub-optimal choices of welding procedures, exacerbated by limitations in the specified weld testing regime for these projects,’ it cautioned.
‘A comprehensive review is currently being undertaken by the group, in conjunction with its affected clients, relevant industry authorities and insurers to fully understand the extent of the actions required to resolve the issue, which has not affected the safety of any operational bridges. Notwithstanding this, we are continuing our work on ongoing road and rail bridges for a variety of clients, which we are confident will meet the required specification.’
Severfield did not name which bridges were affected. Among the projects in its bridges offering are SAS13, ‘an enabler for HS2’ and the Barking Riverside Extension in London for Transport for London.
Brent oil was quoted at $73.09 a barrel early Tuesday afternoon, down from $73.43 at the time of the closing bell in London on Monday. Gold fell to $2,631.71 an ounce from $2,634.92.
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