(Alliance News) - London's FTSE 100 opened slightly higher on Friday, but it was a slow start elsewhere in the UK market, with the release of a US inflationary gauge and possible Donald Trump tariffs which could take effect this week on the horizon.
Convera analyst Boris Kovacevic said the "tariff clock is ticking".
"The February 1st tariff deadline clouds the outlook. Investors are confused by the unclear tariff rollouts from the Trump administration. Recently, the White House confirmed a 25% levy on Canadian and Mexican goods starting February 1st, but the lack of details complicates market pricing," Kovacevic said.
The uncertainty supported gold, which rose above USD2,800 for the first time.
The FTSE 100 index added 28.60 points, 0.3%, at 8,675.48. The FTSE 250 faded ever-so-slightly. It was down just 1.88 points at 20,803.19. The AIM All-Share fell 0.88 point, 0.1%, at 717.35.
The Cboe UK 100 was up 0.3% at 869.45, the Cboe UK 250 was flat at 18,198.62, and the Cboe Small Companies was down 0.2% at 15,905.08.
In Frankfurt, the DAX 40 was flat in early trade, while the CAC 40 added 0.4%.
The pound slipped to USD1.2419 on Friday morning, from USD1.2461 at the time of the London equities close on Thursday. The euro slipped to USD1.0389 from USD1.0423. Against the yen, the dollar bought JPY154.62, up from JPY154.37.
"The European Central Bank, following its expected playbook, dialled down its policy rate by 25 basis points this Thursday. ECB President Christine Lagarde played it cool, steering clear of stirring the pot during her press conference. Yet, this announcement coincided with rather uninspiring GDP figures out of Germany and the broader eurozone. The prevailing slow growth story has cemented investor belief that the ECB's hand will be forced to implement further rate cuts even below the perceived neutral rate," SPI Asset Management analyst Stephen Innes commented.
"The newly appointed US border czar is slated to meet with Canada's top public safety official this Friday. This crucial discussion comes just hours before President Donald Trump's deadline to decide on imposing new tariffs on Canada, which he has threatened unless there is cooperation on curbing the flow of migrants and fentanyl across the border. This information comes from two US sources who are privy to the meeting plans."
Trump reiterated Thursday his threat to place 100% tariffs on Brics nations, as the deadline loomed for him to impose tariffs on Canada and Mexico.
Trump had previously threatened 100% tariffs on Brics nations – a bloc including Brazil, Russia, India, China and South Africa – if they create a rival to the US dollar, which he doubled down on Thursday night.
"The idea that the Brics countries are trying to move away from the dollar, while we stand by and watch, is over," he posted on his Truth Social platform.
"We are going to require a commitment from these seemingly hostile countries that they will neither create a new Brics currency, nor back any other currency to replace the mighty US dollar or, they will face 100% tariffs," he continued.
Trump's comments on possible Brics tariffs came days before a February 1 deadline he set shortly after taking office, whereupon he would place 25% tariffs on neighbours Canada and Mexico unless they cracked down on illegal migrants crossing the US border and the flow of deadly fentanyl.
Friday's global economic calendar sees US personal consumption expenditures price index and employment cost index data at 1330 GMT.
According to consensus cited by FXStreet, the annual core PCE is expected to remain steady at 2.8% for December, where it stood in November. Core PCE is the Federal Reserve's preferred inflationary gauge.
A barrel of Brent fell to USD76.02 early Friday from USD77.18 at the time of the London equities close on Thursday. An ounce of gold was largely unmoved at USD2,794.01 from USD2,793.57. However, it topped the USD2,800 mark for the first time earlier Friday.
Swissquote analyst Ipek Ozkardeskaya said "Trump's tariff threats, the rising geopolitical tensions, the rising US government debt and the fear of a potential tech rout that could lead to a global risk selloff" helped boost gold. In addition, the precious metal was supported by "expectations around central bank policies and Trump-dependency, emerging market central bank gold buying – in case the relations with the US get worse, and shifting market positioning, the analyst said.
In London, Smiths Group jumped 13%. It announced a break-up of the wide-ranging engineering group, alongside plans to increase its share buyback as it looks to "maximise shareholder value".
London-based Smiths said the plans would "unlock significant value and enhance returns to shareholders".
Smiths said it plans to sell its electronic connectors business by the end of 2025 and separate is threat detection arm, either by UK demerger or sale.
"Both businesses have delivered significant recent performance improvement, with Smiths Interconnect's markets returning to growth and Smiths Detection benefiting from the continued airport investment upgrade cycle. Recognising this improvement, the board has decided that the separation of these two divisions now best serves the prospects of these businesses, the group as a whole and our shareholders," the firm said in a statement.
This will leave the group focused on the John Crane and Flex-Tek businesses giving a focus on "high performance industrial technologies for efficient flow and heat management".
Earlier this month, US activist investor Engine Capital said Smiths should explore a split, according to a Financial Times report.
The company also said it has upped its share buyback programme to GBP500 million from GBP150 million. It expects the additional GBP350 million buyback to be completed by the end of calendar 2025.
In addition, Smiths said a "large portion" of all disposal proceeds are to be returned to shareholders.
Grocer Sainsbury's fell 1.9% after HSBC cut the stock to 'hold'.
Elsewhere in London, Tribal Group added 15%. The educational software and services provider expects to report a "positive trading performance" for 2024. Adjusted earnings before interest, tax, depreciation and amortisation, as well as revenue, are to be ahead of current market expectations.
It puts revenue consensus at GBP85.6 million, with the market adjusted Ebitda forecast at GBP14.4 million.
"I am pleased with the performance delivered in FY24 as we focus on the transformation of Tribal into a leading cloud provider to the education market. We have delivered EBITDA and revenue ahead of expectations, alongside a material reduction in our debt, all amidst a challenging market environment," CEO Mark Pickett says. "The group thrives on a strong customer base grounded in long-term relationships. With a growing proportion of that base having now committed to a cloud transition and structural improvements proving successful, we are confident that Tribal is well positioned for the future."
By Eric Cunha, Alliance News news editor
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