Stock prices in blue chip indices in London, Paris and Frankfurt were in the red on Tuesday morning, as traders digest an increasing likelihood that incoming US president Donald Trump will enact punitive tariffs and a very hawkish stance on China.
‘The latest moves from Trump’s camp, especially with China hawks joining his inner circle, are sending chills through the markets and casting a decidedly icy glow on US-China relations,’ SPI analyst Stephen Innes said. ‘With a Republican clean sweep in Congress giving him near-unchecked power, Trump’s got all the tools to turn up the heat on trade...markets are buzzing with speculation that tariffs could be hitting sooner than anyone expected, leaving traders scrambling to position themselves.’
As for the UK labour market, the Office for National Statistics said the ILO unemployment rate rose to 4.3% in the three months to September from 4.0% in the three months to August. This surpassed the FXStreet-cited consensus of 4.1%.
Wage growth slowed down slightly, with average earnings excluding bonuses rising 4.8% annually in the three months to September from 4.9% in the August quarter. However this beat the consensus of a 4.7% rise.
The FTSE 100 index opened down 53.57 points, 0.7%, at 8,071.62. The FTSE 250 was down 160.19 points, 0.8%, at 20,563.34, and the AIM All-Share was down 3.76 points, 0.5%, at 734.17.
The Cboe UK 100 was down 0.6% at 810.69, the Cboe UK 250 was down 0.9% at 18,002.33, and the Cboe Small Companies was down 0.1% at 16,163.70.
ConvaTec led the FTSE 100 with an 18% surge.
The London-based medical technology company has increased its full-year outlook, now expecting 7.3% to 8.0% organic sales growth and a constant currency adjusted operating margin above 21.5%.
ConvaTec also forecast a 2025 operating margin rise along with double-digit growth in adjusted earnings per share.
DCC was close behind, up 16%.
The Dublin-based sales, marketing and support services provider said half-year revenue decreased 3.0% to £9.33 billion, but pretax profit rose to £131.0 million from £129.7 million.
DCC said it expects its full year to show ‘good operating profit growth’. It also noted its ongoing strategic review plans to focus on the energy sector, saying it expects to complete the sale of DCC Healthcare in 2025.
Shell was 0.1% lower.
The oil and gas titan won a Dutch court appeal early on Tuesday, with judges striking down a landmark judgement three years ago that called on Shell to reduce its carbon emissions by 45% by 2030.
But on Tuesday, judges disagreed with the climate groups that brought the original case, saying ‘Shell is already doing what is expected’ of them.
On the FTSE 250, 4imprint lost 5.2%.
This was despite the London-based direct marketer and distributor of promotional merchandise saying overall order revenue has risen 4% in the ten months to October, expecting full-year revenue of $1.37 billion.
However, 4imprint did say the North American promotional products industry currently presents a tough backdrop.
In smaller companies, Facilities by ADF had a tough morning, with its stock plummeting 38%.
The provider of film and television production facilities said a ‘significant number’ of projects in its second-half pipeline will be delayed into 2025 or not proceed at all.
It therefore now expects to report full-year revenue of approximately £35 million and adjusted Ebitda of £7.3 million to £8.0 million. It also expects ‘approximately breakeven’ net income.
In European equities on Tuesday, the CAC 40 in Paris was down 1.0%, while the DAX 40 in Frankfurt was down 1.0%.
The pound was quoted lower at $1.2806 early on Tuesday in London, compared to $1.2875 at the equities close on Monday.
The euro stood down at $1.0623, against $1.0654. Against the yen, the dollar was trading higher at JP¥153.91 compared to JP¥153.81.
In Asia on Tuesday, the Nikkei 225 index in Tokyo was down 0.4%. In China, the Shanghai Composite was down 1.4%, while the Hang Seng index in Hong Kong was down 3.0%. The S&P/ASX 200 in Sydney closed down 0.1%.
In the US on Monday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.7%, the S&P 500 up 0.1% and the Nasdaq Composite up 0.1%.
Brent oil was quoted slightly higher at $71.79 a barrel early in London on Tuesday from $71.76 late Monday.
Gold was quoted lower at $2,600.19 an ounce against $2,617.20.
Berenberg analysts noted that ‘Gold has come under pressure since the [US election] result’. However: ‘While we still expect the gold price to ease over 2025 and beyond, we do not expect a material negative correction.
‘As a result, we think that in a still volatile geopolitical environment, with ongoing conflict, inflation (of which gold is a store of value against), a loosening Federal Reserve policy (albeit not as loose as before) and the potential volatility that comes with a Trump presidency, gold should remain in portfolios.’
Still to come on Tuesday’s economic calendar are the ZEW economic sentiment surveys for the eurozone and Germany, plus US consumer inflation expectations.
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