London close: Ukraine ceasefire hopes lift stocks as trade war escalates
By Michele Maatouk
Date: Wednesday 12 Mar 2025
(Sharecast News) - London stocks ended in the black on Wednesday despite an escalation of Trump's trade war, as Ukraine ceasefire hopes lifted sentiment.
The FTSE 100 closed up 0.5% at 8,540.97.
Donald Trump's 25% tariffs on steel and aluminium came into effect globally on Wednesday, prompting retaliatory measures from the European Union and Canada, with the UK holding back but reserving the right to retaliate.
The European Union said it would impose counter tariffs on €26bn of US goods starting next month.
As far as Canada is concerned, Trump rowed back on his decision to double US tariffs on their steel and aluminium imports to 50%, just hours after making the announcement on Tuesday. This came after the province of Ontario suspended new charges of 25% on electricity that it sends to some northern states in the US.
US tariffs of 25% will still take effect from 12 March, however.
Canada responded by announcing the imposition of 25% reciprocal tariffs on nearly $30bn-worth of US imports into the country. The measures will affect around $12.6bn of US-made steel and $3bn of aluminium, as well as $14.2bn of other American goods such as computers, cast-iron products and sports equipment.
The duties, which cover $29.8bn of products, will be effective from Thursday.
Investors were also mulling news that Ukraine has agreed to a US-proposed 30-day ceasefire with Russia.
Patrick Munnelly at Tickmill Group said: "British stocks rebounded on Wednesday after a dip in the previous session, buoyed by Kyiv's support for Washington's 30-day ceasefire proposal with Russia."
"Strong corporate earnings further bolstered the domestically-focused index," he added.
On the macroeconomic front, data released earlier revealed an easing in US inflation.
ING economist James Knightley said: "We've had a surprisingly cool set of February US consumer price inflation prints of 0.2% month-on-month for both headline and core versus consensus predictions of 0.3%. This pulls the annual rate of headline inflation down to 2.8% from 3% while core inflation dips to 3.1% from 3.3%.
"To three decimal places the MoM change in core inflation was 0.227%, which remains above the 0.17% (black line in the chart below) trend that we need to average to bring inflation down to the Fed's 2% year-on-year target, but this is encouraging news for the Federal Reserve."
However, Knightley said the details were "less rosy", with a substantial 4% month-on-month drop in air fares the main factor driving the softer inflation readings.
In equity markets, Spirax was among the top performers, having slumped a day earlier on the back of results.
Hochschild Mining surged as the gold miner hailed its best financial performance for 13 years.
Hill & Smith rallied as the construction and infrastructure products firm hiked its annual dividend by 14% after seeing underlying profits rise by almost a fifth in 2024.
Infrastructure construction specialist Balfour Beatty gained as it posted an 11% rise in underlying annual earnings and said it would buy back £125m in shares this year.
On the downside, British Airways and Iberia owner IAG flew lower as Barclays downgraded the shares to 'underweight' from 'overweight' and slashed the price target to 250p from 420p. The bank cited potential weakness in the US market. In the same note, Barclays also downgraded Lufthansa and Air France, saying it was a "simple macro call".
Primark owner Associated British Foods fell following disappointing results from Spain's Inditex.
4imprint tumbled as the direct marketer of promotional products posted a rise in full-year profits and revenues but struck a cautious note on the outlook and warned over the potential impact of US tariffs.
JD Sports slumped as German sports brand Puma warned that mounting geopolitical tensions would hit growth.
Financial services group Legal & General fell despite saying it will buy back £500m of shares this year after a strong financial performance in 2024, as part of plans to return more than £5bn to shareholders within three years - equal to around 40% of its market capitalisation.
Core operating profits were up 6% last year at £1.62bn, with a decline in asset management profits outweighed by growth in the retail and institutional retirement divisions.
Market Movers
FTSE 100 (UKX) 8,540.97 0.53%
FTSE 250 (MCX) 19,886.51 0.59%
techMARK (TASX) 4,707.00 -0.02%
FTSE 100 - Risers
Melrose Industries (MRO) 518.00p 6.45%
Spirax Group (SPX) 7,140.00p 5.78%
CRH (CDI) (CRH) 7,562.00p 5.50%
Fresnillo (FRES) 894.50p 4.74%
Rolls-Royce Holdings (RR.) 781.00p 4.50%
Intermediate Capital Group (ICG) 2,090.00p 3.36%
St James's Place (STJ) 1,019.00p 3.14%
Barclays (BARC) 292.10p 3.02%
NATWEST GROUP (NWG) 446.10p 3.00%
Croda International (CRDA) 3,182.00p 2.91%
FTSE 100 - Fallers
International Consolidated Airlines Group SA (CDI) (IAG) 277.60p -4.77%
Associated British Foods (ABF) 1,847.00p -4.35%
Smith & Nephew (SN.) 1,096.00p -3.94%
Persimmon (PSN) 1,194.00p -3.28%
JD Sports Fashion (JD.) 72.88p -3.16%
Kingfisher (KGF) 254.10p -2.72%
Legal & General Group (LGEN) 239.30p -2.29%
BT Group (BT.A) 152.75p -2.27%
Reckitt Benckiser Group (RKT) 5,146.00p -2.24%
Haleon (HLN) 389.30p -2.04%
FTSE 250 - Risers
Hochschild Mining (HOC) 216.00p 12.62%
Hill and Smith (HILS) 1,872.00p 7.96%
Genuit Group (GEN) 370.50p 6.31%
Renishaw (RSW) 2,815.00p 5.63%
Balfour Beatty (BBY) 451.00p 4.52%
Urban Logistics Reit (SHED) 131.20p 4.29%
Coats Group (COA) 83.10p 3.75%
Quilter (QLT) 157.60p 3.74%
Spectris (SXS) 2,534.00p 3.68%
Clarkson (CKN) 3,590.00p 3.59%
FTSE 250 - Fallers
4Imprint Group (FOUR) 4,270.00p -10.86%
Ocado Group (OCDO) 230.30p -4.04%
Chemring Group (CHG) 380.00p -3.31%
Crest Nicholson Holdings (CRST) 146.20p -3.24%
Vistry Group (VTY) 600.50p -3.15%
Rotork (ROR) 324.60p -2.99%
SSP Group (SSPG) 158.00p -2.53%
RHI Magnesita N.V. (DI) (RHIM) 3,450.00p -2.27%
Currys (CURY) 86.65p -2.04%
Aston Martin Lagonda Global Holdings (AML) 80.30p -2.01%
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