(Alliance News) - European equities traded lower on Friday morning, after Asian stocks sunk on the latest tariff barb by US President Donald Trump.
China hit back, threatening to take "all necessary countermeasures". The UK could be set for a "great" trade agreement with the US, however, Trump suggested.
The FTSE 100 index traded down 29.87 points, 0.3%, at 8,726.34. The FTSE 250 was down 146.45 points, 0.7%, at 20,268.28, and the AIM All-Share was down 3.60 points, 0.5%, at 704.12.
The Cboe UK 100 was down 0.3% at 874.59, the Cboe UK 250 was down 0.8% at 17,600.87, and the Cboe Small Companies was down 0.2% at 15,661.65.
The CAC 40 in Paris and Frankfurt's DAX 40 each lost 0.6%.
Sterling fell to USD1.2600 on Friday morning, from USD1.2626 at the time of the London equities close on Thursday. The euro faded to USD1.0399 from USD1.0407. Against the yen, the dollar edged up to JPY150.63 from JPY149.97.
A barrel of Brent declined to USD72.79 from USD73.76. An ounce of gold traded at USD2,854.26, falling from USD2,873.26.
"The tariff bombshell detonated across global trading floors as President Trump doubled down on his hardline trade stance. He confirmed that 25% tariffs on Canada and Mexico are locked in for March 4 while announcing an additional 10% levy on Chinese imports—presumably stacking on top of the 10% tariff already imposed in February. In a social media post, Trump linked these trade actions to drug trafficking and illegal immigration, pointing to Canada and Mexico's role in drug imports and China's involvement in the fentanyl trade," SPI Asset Management analyst Stephen Innes commented.
"Despite the market turmoil, there's still a glimmer of hope that a deal could be reached before the March 4 deadline—assuming Trump's demands are met. But that's a big assumption. Markets don't trade on hope, and last night's reaction was swift on the currency markets and brutal for stocks."
The US and Britain will end up with a "great" trade agreement, President Donald Trump said Thursday during a joint press conference with British Prime Minister Keir Starmer.
"We're going to have a great trade agreement, one way or the other," Trump told reporters in Washington. "We're going to end up with a very good trade agreement for both countries, and we're working on that as we speak."
China on Friday vowed to take "all necessary countermeasures" after US President Donald Trump said he would impose an additional 10% tariff on Chinese imports.
Trump's latest move is due to take effect on Tuesday alongside sweeping 25% levies on Canadian and Mexican imports, intensifying a brewing trade war between the world's two largest economies.
The 10% tariff on Chinese imports will come on top of an existing levy of the same rate imposed by Trump on China earlier this month.
In response to Trump's allegations that Beijing is contributing to a deadly fentanyl crisis in the US – his justification for the tariffs – a spokesperson for China's commerce ministry said in a statement Friday that Washington was "shifting the blame".
"China is one of the countries with the strictest and most thorough anti-narcotics policy in the world," the statement read.
In China, the Shanghai Composite traded 2.0% lower on Friday, while the Hang Seng Index in Hong Kong tumbled 3.3%. Tokyo's Nikkei 225 slumped 2.9% and the S&P/ASX 200 in Sydney shed 1.2%.
Still to come on Friday is a German consumer price index reading at 1300 GMT, before the latest US personal consumption expenditures data at 1330 GMT.
Swissquote analyst Ipek Ozkardeskaya commented: "Yesterday, the US GDP data confirmed that the US grew 2.3% in Q4, as expected, but the price pressures were stronger than pencilled in by analysts.
"Initial jobless claims, on the other hand, hit the highest level since last October, with a visible rise in Washington's jobless claims – as Federal workers are being thanked en masse by Elon Musk's DOGE. Will the latter soften the Federal Reserve outlook and increase bets for more rate hikes this year? It depends on the inflation's trajectory. Due today, the US will reveal its latest core PCE data – the Fed's favourite gauge of inflation - that could show easing in January. If that's the case, we could maybe see the US indices recover a part of the latest weakness."
In London, Pearson, IAG and IMI were leading the way on the FTSE 100 Index.
Pearson rose 3.8% as it hailed "another year of delivery and strategic progress". The publisher of digital and virtual learning materials reported pretax profit increased by 3.4% to GBP510 million last year from GBP493 million in 2023. Sales fell 3.3% to GBP3.55 billion from GBP3.67 billion.
Pearson announced a GBP350 million share buyback.
British Airways owner IAG, also announcing a buyback, added 3.4%. Revenue in 2024 amounted to EUR32.10 billion, rising 9.0% from EUR29.45 billion, helping push pretax profit 17% higher at EUR3.56 billion from EUR3.06 billion. Operating profit before exceptional items increased by 27% to EUR4.44 billion, beating the company-compiled consensus of EUR4.08 billion.
"These results highlight the quality of our businesses and effectiveness of our strategy, underpinned by the successful execution of our transformation programme across the group. We are delivering world-class margins and returns, in line with the targets we set out to the market just over a year ago," Chief Executive Officer Luis Gallego said.
The firm, which also owns Aer Lingus, Iberia and Vueling, proposed a EUR0.06 per share final dividend. It takes its annual dividend to EUR0.09. IAG's EUR0.03 interim dividend was its first since 2019.
In addition, it announced a EUR1.00 billion share buyback, returning excess capital to shareholders over the next 12 months. It had announced a EUR350 million buyback back in November. Looking to 2025, it expects to deliver "sustainable earnings per share growth". Its basic EPS in 2024 rose 3.5% to 55.7 cents from 53.8 cents.
IMI shares perked up 3.1%. The engineering firm said its Process Automation offering enjoyed an "outstanding performance". Pretax profit in 2024 rose 9.3% to GBP330.4 million from GBP302.4 million. Revenue improved 0.6% to GBP2.21 billion from GBP2.20 billion.
Revenue beat company-compiled consensus of GBP2.20 billion. Adjusted operating profit also beat consensus, rising 6.1% to GBP435.5 million from GBP410.6 million. Consensus was for adjusted operating profit of GBP434 million.
The CEO Roy Twite added: "Given the strength of our cash flow, disciplined approach to capital allocation, strong balance sheet and confidence in our future performance, we today announce a further GBP200 million share buyback and a 10% increase to the final dividend. Over the next three years, we expect to generate in excess of GBP1 billion in free cash flow."
Morgan Advanced slumped 15% as it warned of uncertain demand in some end markets. The carbon and ceramic materials manufacturer said it expects a mid-single-digit organic revenue decline for 2025, an outlook that assumes "no recovery" in the second half.
Revenue in 2024 fell 1.3% to GBP1.10 billion from GBP1.11 billion, but pretax profit rose 8.7% to GBP84.6 million from GBP77.6 million.
It lifted its total dividend by 1.7% to 12.2p per share from 12.0p.
Clinical diagnostics firm Oxford BioDynamics plunged 14%.
"The group enters the remainder of 2025 with replenished but limited cash resources. The directors have concluded, as was the case at the previous year end, that material uncertainties exist which may cast significant doubt on the group and company's ability to continue as a going concern," the firm said in its annual results.
Its pretax loss in 2024 stretched to GBP12.0 million from GBP11.4 million. Revenue rose to GBP636,000 from GBP510,000.
By Eric Cunha, Alliance News news editor
Comments and questions to newsroom@alliancenews.com
Copyright 2025 Alliance News Ltd. All Rights Reserved.
