London open: FTSE falls as investors mull Trump's reciprocal tariffs
By Michele Maatouk
Date: Friday 14 Feb 2025
(Sharecast News) - London stocks edged lower in early trade on Friday as investors mulled US President Trump's reciprocal tariffs announcement.
At 0835 GMT, the FTSE 100 was down 0.3% at 8,735.50.
On Thursday, Trump announced reciprocal tariffs which will target every country that charges duties on US imports.
He told reporters in the Oval Office: "On trade, I have decided for purposes of fairness, that I will charge a reciprocal tariff, meaning whatever countries charge the United States of America, we will charge them. No more, no less."
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "As the world holds its breath in anticipation of where the latest round of US tariffs will land, the Footsie has lost ground in early trade.
"Although President Trump's pledge to impose reciprocal tariffs on trade partners has set off a fresh round of uncertainty, the more gradual approach has been tentatively welcomed. With a fresh deadline set for April, he's essentially triggered fresh rounds of talks, and haggling is set to ensue with leaders.
"The UK government had hopes it may escape the worst of the tariffs given the majority of trade with the US is in services rather than goods. But with Trump's claims that VAT is a tariff and the digital services tax on tech giants also in scope, trade envoys and ambassador Peter Mandelson will have their work cut out to claim that the UK should be viewed as a special case.
"Like other nations, the UK remains highly vulnerable to the whims of capricious US policy. The pound has regained further form against the dollar, still helped by the better than forecast growth in the UK economy at the end of last year, with traders also sanguine for now about the knock-on effects of US trade policy. This puts a little more pressure on the overseas earnings of the multinationals listed on the FTSE 100, although sterling is still trading 6% lower than its level back in September."
In equity markets, NatWest fell even as the bank just beat expectations as it grew its loan book and pulled in more deposits, boosted by an increase in customers.
Pre-tax operating profit rose 0.3% to £6.2bn in the 12 months to 31 December compared with estimates of £6.1bn. Net interest margin - the difference between loan and savings rates - was one basis point higher at 2.13%.
The bank reported a return on tangible equity of 17.5%, beating its own upgraded guidance. Total income for the year, excluding one-off items, grew by 2.2% to £14.6bn, reflecting growth in deposit margins and lending.
NatWest said it expected to achieve a return on tangible equity in the range of 15-16% this year and more than 15% by 2027. It expects to generate income of £15.2bn - £15.7bn this year.
HSBC was also in the red following a Bloomberg report that it will initiate a fresh round of layoffs at its investment bank as early as Monday.
It was understood the first cuts will be carried out in Asia and then be expanded to the rest of the lender's staff. The number of redundancies was not clear.
Wood Group tumbled as it said it had taken actions to mitigate weaker-than-expected trading in the fourth quarter, including cancelling executive and employee bonuses and actively managing working capital at year end.
It also said it was initiating steps to "strengthen significantly" its financial culture, governance and controls after a review by Deloitte identified "material" weaknesses and failures.
Market Movers
FTSE 100 (UKX) 8,735.50 -0.33%
FTSE 250 (MCX) 20,928.40 0.06%
techMARK (TASX) 4,745.89 -0.26%
FTSE 100 - Risers
Flutter Entertainment (DI) (FLTR) 22,850.00p 3.77%
Fresnillo (FRES) 827.50p 3.70%
Entain (ENT) 709.60p 1.78%
Antofagasta (ANTO) 1,874.50p 1.76%
Anglo American (AAL) 2,500.00p 1.42%
Glencore (GLEN) 350.25p 1.39%
CRH (CDI) (CRH) 8,496.00p 1.00%
Persimmon (PSN) 1,266.00p 0.96%
Rio Tinto (RIO) 5,076.00p 0.73%
Croda International (CRDA) 3,220.00p 0.63%
FTSE 100 - Fallers
BAE Systems (BA.) 1,222.00p -2.08%
NATWEST GROUP (NWG) 428.10p -2.04%
Vodafone Group (VOD) 66.42p -1.31%
HSBC Holdings (HSBA) 865.30p -1.21%
Diageo (DGE) 2,160.50p -1.12%
AstraZeneca (AZN) 11,846.00p -0.99%
GSK (GSK) 1,432.00p -0.87%
Rolls-Royce Holdings (RR.) 619.00p -0.86%
Convatec Group (CTEC) 242.40p -0.82%
National Grid (NG.) 955.40p -0.69%
FTSE 250 - Risers
XPS Pensions Group (XPS) 395.00p 13.83%
Ninety One (N91) 155.00p 4.73%
Ferrexpo (FXPO) 96.00p 3.11%
Fidelity China Special Situations (FCSS) 250.00p 2.88%
Hochschild Mining (HOC) 197.40p 2.60%
Foresight Group Holdings Limited NPV (FSG) 406.00p 2.27%
Mony Group (MONY) 193.90p 1.36%
Carnival (CCL) 1,870.00p 1.36%
Domino's Pizza Group (DOM) 299.40p 1.35%
Bridgepoint Group (Reg S) (BPT) 389.40p 1.30%
FTSE 250 - Fallers
Wood Group (John) (WG.) 49.64p -24.04%
AO World (AO.) 96.30p -3.89%
NCC Group (NCC) 136.00p -2.58%
Kier Group (KIE) 148.20p -2.11%
Impax Environmental Markets (IEM) 388.50p -1.65%
Telecom Plus (TEP) 1,670.00p -1.42%
Energean (ENOG) 975.50p -1.27%
Essentra (ESNT) 122.60p -1.13%
3i Infrastructure (3IN) 318.50p -1.09%
Wizz Air Holdings (WIZZ) 1,669.00p -1.07%
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