Diageo pulls guidance on Trump tariffs, Vodafone revenue falls in Germany
London open
The FTSE 100 is expected to open 15 points lower on Tuesday, having closed down 1.04% on Monday at 8,583.56.
Stocks to watch
Beverages giant Diageo has pulled its medium-term guidance ahead of incoming tariffs on Mexican and Canadian imports by the Trump administration, saying it cannot yet accurately predict how additional duties will affect its financial performance. Diageo’s tequila portfolio, which given geographic origin requirements must be made in Mexico, and also its Canadian whisky brands would be mainly affected by the protectionist measures.
Vodafone reported another revenue decline in its key German market, denting a solid overall third quarter performance across other regions. The telecoms giant said German sales were down 6.4% in the period, compared with a 6.2% decline in the previous three months, primarily due to the impact of a new state media law. Despite the fall Vodafone reiterated full year guidance of €11bn in core earnings.
Great Portland Estates announced the appointment of William Eccleshare as a non-executive director and its chair designate on Tuesday, effective 1 May, succeeding Richard Mully as chair after the company's July annual general meeting. The FTSE 250 company said Eccleshare had extensive leadership experience in advertising, media, and corporate governance, and was selected after a comprehensive process led by senior independent director Nick Hampton. Separately, it said Hampton himself would step down from the board on 3 April, with Karen Green succeeding him as senior independent director from 4 April.
Newspaper round-up
The UK’s science minister, Chris Bryant, has described AstraZeneca’s decision to scrap plans for a £450m expansion of its vaccine plant in Merseyside as “deeply disappointing”. The pharmaceutical company announced on Friday that it was axing the planned expansion of its factory in the Liverpool suburb of Speke, citing factors “including the timing and reduction of the final offer compared to the previous government’s proposal”. – Guardian
A group of investors has accused Thames Water of putting “a gun to the head” of London’s high court by threatening to go into temporary nationalisation if it does not receive approval for a rival £3bn debt offer. The court heard the first day of arguments deciding between two rival plans to lend emergency cash to Thames Water, Britain’s biggest water company. Thames provides water and sewerage services to nearly a quarter of the UK population in London and south-east England. – Guardian
Construction activity has slumped across Britain’s biggest regional cities, underscoring the depth of the challenge facing Angela Rayner as she seeks to trigger a building boom. Developers made a start on 47 new projects in cities outside London last year according to Deloitte’s regional crane survey, which monitors construction in the central areas of Leeds, Belfast, Manchester and Birmingham. – Telegraph
A US hedge fund tycoon has failed in his latest attempt to seize control of two UK investment funds after facing a backlash from shareholders. Investors in the two funds run by Baillie Gifford on Monday voted against a series of proposals put forward by Boaz Weinstein’s hedge fund, Saba Capital Management, which called for a complete overhaul of the two funds’ boards. – Telegraph
Claims that defects in Funding Circle’s documentation and processes have left a firm owned by the hedge fund Elliott Management unable to pursue small business owners over personal guarantees are to be heard by the High Court. Azzurro Associates, which is owned by one of the world’s largest hedge funds, is pursuing two directors of a business borrower in a closely watched case which will test claims that payment under the guarantees is not due to Azzurro despite its contentious acquisition of loans from Funding Circle. – The Times
US close
Major indices closed lower on Monday after Donald Trump slapped several key trading partners with tariffs, leading to fears that a full-blown trade war would disrupt global supply chains, reignite inflation and slow economic growth.
At the close, the Dow Jones Industrial Average was down 0.28% at 44,421.91, while the S&P 500 lost 0.76% to 5,994.57 and the Nasdaq Composite saw out the session 1.20% weaker at 19,391.96.
The Dow closed 122.75 points lower on Monday, extending losses recorded in what was a volatile week for stocks as concerns about a bubble in the US artificial intelligence industry hammered market sentiment.
News that Donald Trump slapped a 25% tariff on goods from Mexico and Canada and also placed a 10% levy on imports from China was in focus throughout the session.
Canada responded with retaliatory tariffs of its own, while China vowed to file a lawsuit with the World Trade Organization.