(Alliance News) - The FTSE 100 was called to open lower on Tuesday, following a US tech stock rally on Monday and ahead of a slew of US data readings.
Tesla closed nearly 12% higher on Monday, while Nvidia and Apple rose by 1.1% and 3.2% respectively.
"The week started on quite a positive note on hope that the next wave of US tariffs – expected to hit the ground on April 2nd - would be more targeted and more measured than previously thought. But Trump still threatened to impose 25% levies on countries that buy oil from Venezuela," commented Swissquote analyst Ipek Ozkardeskaya.
"Chinese equities are under pressure this morning as the country buys oil from Venezuela and is concerned by the new tariff threats from the White House. And the barrel of US crude gained around 1.30%, though offers weighed heavier into the USD69.5pb mark. Trend and momentum indicators are growing stronger, hinting that a rise above the USD70pb is increasingly possible in the short run. But the long-term demand and supply dynamics remain in favour of cheaper oil – an expectation that’s already priced in, but could still prevent oil bulls from gaining too much traction after a potential break of the USD70pb resistance."
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called down 0.3% at 8,611.01
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Hang Seng: down 2.4% at 23,329.65
Nikkei 225: closed up 0.5% at 37,780.54
S&P/ASX 200: closed up 0.1% at 7,942.50
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DJIA: closed up 597.97 points, or 1.4%, at 42,583.32
S&P 500: closed up 100.01 points, or 1.8%, at 5,767.57
Nasdaq Composite: closed up 404.54 points, or 2.3%, at 18,188.59
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EUR: down at USD1.0788 (USD1.0795)
GBP: down at USD1.2906 (USD1.2918)
USD: up at JPY150.65 (JPY150.56)
Gold: up at USD3,015.25 per ounce (USD3,011.44)
(Brent): up at USD73.15 a barrel (USD72.98)
(changes since previous London equities close)
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ECONOMICS
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Tuesday's key economic events still to come:
12:40 GMT US Federal Reserve Governor Adriana Kugler speaks
12:55 GMT US Redbook index
13:00 GMT US S&P/Case-Shiller home price index
13:00 GMT US house price index
14:00 GMT US Conference Board consumer confidence
14:00 GMT US new home sales
14:00 GMT US Richmond Fed manufacturing index
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Thousands of new homes in England will be built as part of the biggest boost in social and affordable housebuilding in a generation, the UK government has said. Chancellor Rachel Reeves has vowed that GBP2 billion in grant funding to deliver up to 18,000 new homes in England will go some way to "fixing the housing crisis". The funding is described by the government as a "down payment from the Treasury" ahead of longer-term investment in social and affordable housing expected to be announced later in the year. At least half of the planned 18,000 homes are expected to be social homes, as charities urged that the "vast majority" should be for social rent amid record highs in homelessness across the country.
The number of households on local authority waiting lists, or registers, for social housing in England stood at 1,330,611 in 2024 – the highest figure in a decade. The housebuilding boost is aimed at helping to fulfil the government's pledge to build 1.5 million new homes over the next five years, and comes a day ahead of Reeves' spring statement on Wednesday.
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The US will impose steep tariffs on imports from countries buying Venezuelan oil & gas. The latest across-the-board 25% levies - on top of existing rates - targeting direct and indirect buyers of Venezuelan oil can take effect as soon as April 2, according to an order signed Monday by President Donald Trump. In February, Venezuela exported some 500,000 barrels of oil per day to China and this figure was 240,000 barrels for the US, experts told AFP. The same experts also highlighted India and Spain as vulnerable to the new tariff. In his Monday announcement on Truth Social involving Venezuela, the president cited "numerous reasons" for what he called a "secondary tariff." He accused Venezuela of "purposefully and deceitfully" sending "undercover, tens of thousands of high level, and other, criminals" to the US.
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The North Sea could produce about half of the oil & gas the UK will need in the run up to 2050, but only if new projects can be developed, industry chiefs have said. As it stands the trade association Offshore Energies UK said the UK is on track to produce just 4 billion of the 13 to 15 billion barrels of oil and gas the country will need over the next 25 years. However, OEUK argued that by "unlocking additional resources from waters around the coast" this could be increased to about 7 billion barrels, a move which the industry body said could be worth GBP150 billion to the UK economy. OEUK Chief Executive David Whitehouse however told journalists that while "the bulk of that additional oil and gas" could come from existing fields, it would "require new projects to meet that target" of the UK producing 7 billion barrels. Ben Ward, market intelligence manager for OEUK, meanwhile said that gas from the North Sea had fewer carbon emissions associated with it than imported gas. "By 2050 a fifth of the energy we consume will still be oil and gas, even under a net zero scenario," Ward added.
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The UK Financial Conduct Authority has said it will explore how it can simplify communications about savings accounts, as well as review parts of its credit advertising rules, such as lengthy terms and conditions. The regulator is also looking at its expectations for mortgage lending, as part of a range of proposals to streamline its rules, reduce burdens on businesses and improve outcomes for consumers. The work will help to build on the Consumer Duty which was previously introduced by the regulator, requiring financial firms to put customers at the heart of what they do, including in their communications and in the design of their products. The FCA also said it has received "clear feedback" from industry that now is not the time for widespread changes to its rules, and has said it will continue to engage with industry and others to "get the balance right". Plans include reviewing current disclosure rules to give firms more flexibility to tailor their communications to customers' needs and preferences, such as online and digital transactions. It also plans to "retire" some guidance for firms which has become outdated.
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Proposals to revitalise US shipbuilding are facing pushback from businesses, with retailers warning Monday that added fees targeting Chinese-built vessels could bring higher costs and supply chain problems. Shipbuilding has been in steady decline in the US, with the world's biggest economy falling far behind its main rival, China. President Trump has promised to reverse this, vowing to "resurrect" the industry. But a key proposal that some business groups oppose involves charging port entrance fees of up to USD1.5 million for Chinese-built ships, among other remedies recently raised by the US Trade Representative's office. While the shipbuilding sector "might see small gains over time," costs to other sectors and the broader economy would be greater, argued the National Retail Federation and Retail Industry Leaders Association. Both groups had commissioned a study alongside 30 other organisations in different industries to examine the ramifications of the USTR's proposals, which also include export restrictions. They said that as higher costs filter through the economy, sectors could see declines in sales and employment too. Retailers are also concerned that carriers may seek to avoid fees by cutting out smaller ports and overwhelming bigger ones, adding to congestion and other supply chain challenges.
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The German Bundestag, the lower house of parliament, is scheduled to convene for its constituent session on Tuesday following the elections of February 23, with lawmakers set to elect a Bundestag president. The session is to be opened by Gregor Gysi, the longest-serving member of parliament, who will preside over the meeting until a new Bundestag president is elected. The conservative CDU/CSU parliamentary group of Friedrich Merz, Germany's presumptive next chancellor, nominated experienced politician Julia Klockner to be the next Bundestag president. Traditionally, the largest parliamentary group, which in the new parliament is the conservative alliance comprised of the Christian Democratic Union, CDU, and the Bavaria-only Christian Social Union, CSU, fills this post. The Bundestag president occupies the second-highest office of state after the federal president, so in protocol terms this is superior in rank to the chancellor and the president of the upper house, the Bundesrat.
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BROKER RATING CHANGES
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Berenberg raises Unilever price target to 5,750 (5,640) pence - 'buy'
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RBC cuts Greggs price target to 2,520 (2,870) pence - 'outperform'
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Barclays raises Crest Nicholson target to 221 (198) pence - 'equal weight'
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COMPANIES - FTSE 100
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Kingfisher reports a 35% decline in pretax profit for the year that ended January 31, falling to GBP307 million from GBP475 million a year prior. Sales for the year were down 1.5% to GBP12.78 billion from GBP12.98 billion, while basic earnings per share tumble 45% to 10.1 pence from 18.2p. The home improvement retailer left its final dividend unchanged at 8.60p per share, bringing its total dividend to an unchanged 12.40p. Looking ahead, the firm expects adjusted pretax profit between GBP480 million and GBP540 million for financial 2026, up 2.3% on-year at best from GBP528 million, and says it is "confident" in the medium to longer-term outlook for the sector. Kingfisher also expects to fully offset GBP145 million in additional operating costs in financial 2026. Chief Executive Officer Thierry Garnier comments: "The recent government budgets in the UK and France have raised costs for retailers and impacted consumer sentiment in the near term. With this in mind, we remain focused on what is in our control - progressing our strategic objectives at pace to deliver further market share gains, and continuing to manage gross margin, costs and cash effectively." Kingfisher announces another share buyback programme for up to GBP300 million, further to its recently completed GBP300 million buyback. Kingfisher has now completed GBP900 in buybacks since September 2021, and the first tranche of its latest programme will begin "soon".
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Shell aims to grow its liquefied natural gas sales by 4% to 5% a year through to 2030, the energy major said ahead of its 2025 Capital Markets Day. It intends to boost shareholder distributions to 40% to 50% of cash flow from operations, up from its current 30% to 40% level, and plans to continue to prioritise share buybacks, as well as maintain a 4% annual progressive dividend. Shell plans to increase its structural cost reduction target to USD5 billion to USD7 billion by the end of 2028, and will maintain the climate targets and ambitions set out in 2024. "Shell will continue to deliver more value with less emissions, growing in areas where we have competitive strengths, and providing a compelling investment case for our shareholders, now, and into the future," said the firm.
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COMPANIES - FTSE 250
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Renewable electricity generator Drax agrees to acquire Harmony Energy Income Trust for 88.0p per share in cash, valuing the investor in UK battery energy storage systems at GBP199.9 million. "Adding battery storage to our FlexGen portfolio enables us to provide even more secure power to the country when it is needed," says Drax. "In combination with our long duration storage, flexible generation, demand side response capabilities and renewable generation from biomass, we will be able to supply 4.5GW of dispatchable generation to meet demand." Drax notes that 19.6% of HEIT shareholders are already supportive of the takeover, with the deal conditional on receiving 75% approval at HEIT's general meeting. "We are working to create value and growth in the short, medium and long-term, aligned to the UK's energy needs, and which the Drax directors believe is underpinned by strong cash generation, a disciplined approach to capital allocation and attractive returns for shareholders," the firm added.
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OTHER COMPANIES
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Henry Boot reports a pretax profit decline of 18% for 2024, to GBP30.7 million from GBP37.3 million the year before. Revenue falls 8.6% to GBP328.4 million from GBP359.4 million, as a result of "reduced turnover in our construction segment, offset by higher sales from Hallam Land", while the fair value of its investment properties multiplies to GBP4.5 million from GBP307,000. Nonetheless, the property development firm declares a final dividend of 4.62p per share, up 5.0% on-year from 4.40p, bringing its total dividend up 5.0% on-year to 7.70p from 7.33p. "As anticipated, after a challenging start to the year we delivered a strong second half which allowed us to report results in line with expectations. In particular, demand for our high quality land, prime development and premium homes has remained resilient. This led to us successfully completing almost GBP350 million in land and property sales and continuing to lease up space, including setting a record office rent in Manchester at our Island development. Our investment portfolio also recorded another period of outperformance, with a total return of almost 10% for the year, meaning it has returned more than double the index over the last five years," comments Chief Executive Officer Tim Roberts. Henry Boot says it continues to make "good progress" towards meeting its medium-term growth and return targets.
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By Emily Parsons, Alliance News reporter
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