Stock prices in London, Paris and Frankfurt were in the red on Tuesday morning, amid news that UK grocery sales growth slowed in February, amid worries about US tariffs.
‘Today marks a turning point in Donald Trump’s tariff policy,’ commented Swissquote’s Ipek Ozkardeskaya. ‘It is the day the tariff threat will materialise – 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.’
UK grocery sales growth decelerated last month, with once again the market share of all large UK supermarket chains growing except Asda, data from Kantar showed.
For the 12 weeks to February 23, total grocery sales rose 3.2% on-year to £36.47 billion. In February alone, sales were 3.6% higher. In the four weeks to January 26, sales had risen 4.3% on-year.
Grocery price inflation held steady at 3.3%, while spending on deals rose again.
Sally Ball, head of retail at Kantar, said: ‘We haven’t gone back to old patterns and shopping trips remain below pre-pandemic times. Households made one less visit to the supermarket in February 2025 than in 2020, while online shopping appears to have stuck, taking a 12.3% market share this month versus 8.6% in February 2020.’
The FTSE 100 index opened down 52.36 points, 0.6%, at 8,818.95. The FTSE 250 was down 94.29 points, 0.5%, at 20,288.00, and the AIM All-Share was down 4.39 points, 0.6%, at 697.41.
The Cboe UK 100 was down 0.6% at 883.72, the Cboe UK 250 was down 0.5% at 17,617.92, and the Cboe Small Companies was down 0.2% at 15,583.10.
Intertek led the FTSE 100, gaining 5.9%.
The testing, inspection and certification firm said its 2024 pretax profit rose on-year to £547.8 million, while revenue increased to £3.39 billion.
It also hiked its final and total dividends to 102.6 pence and 212.7p respectively, and said it entered the first half of 2025 with confidence, expecting mid-single digit like for like revenue growth at constant currency.
Ashtead Group was the second-worst performer, down 3.6%.
The industrial equipment rental provider reported a 1% increase in third-quarter rental revenue to $2.38 billion, and predicted full-year results in line with guidance including 3% to 5% rental revenue growth.
It also reported a 7% on-year decrease in pretax profit to $409 million.
Keller was the second-biggest FTSE 250 winner, up 13%.
Its 2024 pretax profit rose to £183.9 million from £125.6 million in 2023, while revenue rose to £2.99 billion. It declared a total dividend of 49.7p, up 10% on-year.
The geotechnical engineering company also announced a new share buyback with an initial £25 million tranche in the first quarter.
Greggs was the worst performer, down 10%.
This was despite revenue and profit rising in 2024 alongside an increased dividend. The bakery chain also said its sales are on track to double by 2026.
In other UK news, food prices have risen at their third fastest monthly rate in a year with food inflation accelerating to 2.1% in February, a jump from January’s yearly growth of 1.6%, according to the British Retail Consortium-NIQ shop price index.
The BRC has already said it expects food inflation to hit 4% by the second half of the year.
Meanwhile, Make UK said the economy could receive a multibillion-pound boost over the next decade if Britain’s small to medium-sized manufacturers achieve their growth ambitions. The business group urged the government to introduce measures such as a ‘super-growth allowance’ to help deliver.
Most smaller UK manufacturers want to grow their business but face barriers including access to finance and skills shortages, according to Make UK’s report.
In European equities on Tuesday, the CAC 40 in Paris was down 1.0%, while the DAX 40 in Frankfurt was down 1.3%.
The pound was quoted higher at $1.2722 early on Tuesday in London, compared to $1.2710 at the equities close on Monday. The euro stood higher at $1.0522, against $1.0498. Against the yen, the dollar was trading lower at JP¥149.24 compared to JP¥150.20.
In Asia on Tuesday, the Nikkei 225 index in Tokyo was down 1.2%. In China, the Shanghai Composite was up 0.2%, while the Hang Seng index in Hong Kong was down 0.2%. The S&P/ASX 200 in Sydney closed down 0.6%.
China’s largest political event of the year begins in Beijing on Tuesday, as US tariffs cast a cloud over the ‘Two Sessions’ meetings, concurrent gatherings of China’s rubber-stamp parliament and a separate political advisory body.
Premier Li Qiang will deliver a speech expected to unveil economic targets as China faces sluggish growth and a widening trade war with the US.
Analysts polled by AFP broadly agreed that Beijing will set a goal of around 5% growth – the same as 2024, although observers say this is an ambitious goal given the economic headwinds China is facing.
In the US on Monday, Wall Street ended lower, with the Dow Jones Industrial Average down 1.5%, the S&P 500 down 1.8% and the Nasdaq Composite down 2.6%.
US President Donald Trump said that there was ‘no room left’ for Mexico or Canada to avoid his planned tariff hikes, with hours to go before levies of up to 25% kick in.
In response Canadian Prime Minister Justin Trudeau said ‘there is no justification’ for Washington’s actions. Trudeau added in a statement: ‘Should American tariffs come into effect tonight, Canada will, effective 12:01 a.m. EST tomorrow, respond with 25% tariffs against $155 billion of American goods.’
The White House also said Trump had inked an order to increase a previously imposed 10% tariff on China to 20%, with Beijing subsequently warning that it would take countermeasures.
‘The realisation that the tariff threats will turn into reality hit sentiment, along with unideal ISM data showing that US manufacturing activity slowed more than expected in February while prices rose significantly faster than expected,’ commented Ozkardeskaya. ‘And there is no magic, the tariffs are about the make the inflation headache worse in the US.
‘Rising inflation expectations reduce the Federal Reserve’s [Fed] ability to ease policy to give support to slowing economy. And when the Fed is no longer there to save the market, bad news become bad news.’
Brent oil was quoted lower at $70.69 a barrel early in London on Tuesday from $72.59 late Monday.
Gold was quoted higher at $2,911.65 an ounce against $2,888.92.
Still to come on Tuesday’s economic calendar is eurozone unemployment data, Irish construction output figures and the US Redbook index.
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