European stocks were higher on Tuesday afternoon, with New York stocks set for a quieter start after a tumultuous Monday trade which saw tech stocks dive.
The FTSE 100 index added 51.82 points, 0.6%, at 8,555.53. The FTSE 250 was up 190.59 points, 0.9%, at 20,560.09, and the AIM All-Share rose 3.37 points, 0.5%, at 714.76.
The Cboe UK 100 was 0.6% higher at 857.38, the Cboe UK 250 rose 1.0% at 17,993.35, and the Cboe Small Companies was down 0.3% at 15,969.43.
In Frankfurt, the DAX 40 rose 0.6% in early afternoon trade, while the CAC 40 was up 0.4%.
Against the dollar, the pound fell to $1.2432 early Tuesday afternoon, from $1.2479 at the time of the London equities close on Monday. The euro faded to $1.0425 from $1.0505. Against the yen, the dollar surged to JP¥155.38 from JP¥154.16.
Donald Trump said Monday that the US will soon place tariffs on foreign-made semiconductor chips, pharmaceuticals and metals such as steel.
Speaking at a Republican congressional retreat in Miami, Trump said the levies could take place in the ‘very near future,’ so as to ‘return production of these essential goods to the US of America.’
‘If you want to stop paying the taxes or the tariffs, you have to build your plant right here in America,’ he added.
XTB analyst Kathleen Brooks commented: ‘The one thing that is bigger than the AI story right now is Donald Trump. His thoughts on DeepSeek’s cheap AI large language model were always going to be important for traders, however, he didn’t dwell on DeepSeek for long. Instead, he stated his desire for ’much bigger’ universal tariffs than the 2.5% favoured by the now confirmed Treasury Secretary Scott Bessent.’
The emergence of DeepSeek hit US tech hard on Monday, but the sell-offs spread to power stocks too.
Constellation Energy and GE Vernova fell 21% and 22%. The pair are 4.0% and 2.7% higher in pre-market dealings in New York.
Chip maker Nvidia, at the heart of the recent AI craze, was up 4.7% in pre-market dealings, after a slump overnight.
SPI Asset Management analyst Stephen Innes commented: ‘Chinese startup DeepSeek’s low-cost AI model sparked concerns about the sector’s inflated valuations.
‘The impact was catastrophic for Nvidia, a linchpin in the AI chip revolution. Its shares plunged 17%, erasing nearly $600 billion in market value and tarnishing the lustre of the market’s poster child.’
US stock market futures point to a calmer day on Tuesday. The Dow Jones Industrial Average is called to open flat, the S&P 500 up 0.3% and the Nasdaq Composite 0.6% higher.
Among London’s large-caps gains were largely broad-based.
Pest control and hygiene firm Rentokil added 2.9% on a well-received trading statement, Primark owner AB Foods rose 2.9% despite Bank of America reinitiating it at only ’underperform’, while investor Scottish Mortgage Investment Trust added 1.9%. Scottish Mortgage backs a who’s who of tech names, so it fell under the cross-hairs of Monday’s DeepSeek worries, losing 5.2%.
Keeping a lid on the FTSE 100’s progress, miners struggled. Glencore fell 0.8%, Rio Tinto lost 0.5% and Antofagasta declined 0.3%.
Elsewhere, SSP rose 3.7%. It said it continued to anticipate on-year revenue and earnings growth for the current financial year, noting continued structural growth across the global travel industry.
The London-headquartered operator of food outlets at travel locations and owner of Upper Crust brand, holding its annual general meeting on Tuesday, said sales grew 11% on-year in the three months to December 31, its first financial quarter. They rose 14% at constant currency.
SSP expects revenue of between £3.7 billion and £3.8 billion for the financial year that will end in September, at least 7.8% higher than £3.43 billion in financial 2024.
Irn-Bru maker AG Barr added 5.3%. It expects to deliver strong top line growth driven by demand for its three core soft drinks.
The Cumbernauld, Scotland-based soft drink and energy drink manufacturer said Irn-Bru, Rubicon and Boost had all performed strongly in the financial year ending January 25, with Rubicon the stand-out performer.
In a trading update, AG Barr said annual revenue is expected to be around £420 million, up 5% from £400 million a year prior. This is line with company compiled consensus.
Elsewhere in London, Wickes added 12%. The home improvement retailer said it returned to revenue growth in the second half of its financial year.
It expects to report revenue for the year that ended December 28 of £1.54 billion, a decline of 1.0% from £1.54 billion in financial 2023.
For the second half alone, Wickes says it generated revenue of £738.9 million, a climb of 1.8% on-year. Revenue had shrunk 3.4% in the first half.
Wickes now expects adjusted pretax profit for the full-year to be at the upper end of the £39.7 million to £44.0 million consensus range.
Pressure Technologies shares rose 10% as the engineering firm reported a contract win. It won a deal with General Dynamics Electric Boat, the submarine making subsidiary of defence firm General Dynamics.
Pressure’s Chesterfield Special Cylinders unit will supply safety-critical pressure vessels to GDEB. GDEB designs, constructs and supports submarines for the US Navy.
The Federal Open Market Committee kicks off its two-day meeting on Tuesday, before a decision at 1900 GMT on Wednesday.
Analysts at ING commented: ‘After 100bp of rate cuts the Fed has signalled it needs evidence of economic weakness and more subdued inflation prints to justify further policy loosening. President Trump’s low tax, light-touch regulation policies should be good news for growth, while immigration controls and trade tariffs provide upside risk for prices, suggesting we could have a long wait for the next cut.’
Brent oil was quoted at $77.77 a barrel midday Tuesday, rising from $77.26 at the time of the London equities close on Monday. Gold rose to $2,743.81 an ounce from $2,740.66.
Still to come on Tuesday is a US durable goods orders reading at 1330 GMT.
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