London close: Stocks lower as China hits back at Trump tariffs

Vodafone Group
67.30p
17:04 13/02/25
London stocks ended lower on Tuesday as investors reacted to renewed trade tensions between the United States and China.
Barratt Redrow
461.30p
16:40 13/02/25
Beverages
18,697.36
17:14 13/02/25
Crest Nicholson Holdings
171.90p
16:40 13/02/25
Diageo
2,185.00p
17:15 13/02/25
Dunelm Group
1,003.00p
17:15 13/02/25
Entain
697.20p
17:15 13/02/25
Food & Drug Retailers
4,478.32
17:14 13/02/25
FTSE 100
8,764.72
16:40 13/02/25
FTSE 250
20,916.14
17:14 13/02/25
FTSE 350
4,802.97
17:14 13/02/25
FTSE All-Share
4,751.81
16:59 13/02/25
General Retailers
4,961.06
17:14 13/02/25
Household Goods & Home Construction
11,097.88
17:14 13/02/25
Mobico Group
70.60p
16:45 13/02/25
Mobile Telecommunications
2,033.47
16:59 24/01/22
SSP Group
178.30p
16:40 13/02/25
Travel & Leisure
9,495.54
17:14 13/02/25
Wizz Air Holdings
1,687.00p
16:59 13/02/25
The FTSE 100 index slipped 0.15% to 8,570.77 points, while the FTSE 250 declined 0.28% to 20,653.26 points.
Tuesday’s losses followed China’s announcement of retaliatory tariffs on a range of US imports, raising concerns over the broader implications for global trade.
In currency markets, sterling was last up 0.27% on the dollar to trade at $1.2484, but it edged down 0.07% against the euro, changing hands at €1.2027.
“The Nasdaq 100 gained over a percentage point, helped by Palantir's better-than-expected Q4 earnings and 26% rally in its share price,” said IG senior technical analyst Axel Rudolph.
“Positive sentiment after President Trump's 30-day moratorium regarding US tariffs on Mexico and Canada has led to global stock market gains, the exception being the FTSE 100 which awaits Thursday's Bank of England rate decision.
“At the monetary policy meeting, a 25 basis point rate cut to 4.5% is expected.”
Rudolph noted that US job openings falling more than expected, economic optimism missing expectations and factory orders plunging the most in six months did not seem to dampen investor mood.
“The gold price shot up to a new record high for the fourth straight day while the price of oil slid by around one percent.”
China slaps retaliatory tariffs on US
In economic news, China escalated trade tensions with the United States overnight, unveiling retaliatory measures in response to fresh tariffs imposed by US president Donald Trump.
Beijing launched an investigation into Google and imposed new levies, including a 15% tariff on US coal and liquefied natural gas, along with 10% duties on crude oil, farm equipment, large vehicles, and pickup trucks.
China’s commerce ministry also announced export controls on key minerals such as tungsten, tellurium, and molybdenum, citing national security concerns.
The finance ministry condemned Washington’s actions, saying they violated World Trade Organization rules and harmed economic cooperation.
Meanwhile, Beijing also placed US firms PVH Group and Illumina on its unreliable entity list, exposing them to potential restrictions.
Trump also removed the ‘de minimis’ exemption for Chinese imports under $800, a move seen as targeting discount retailers like Shein and Temu.
Separately, the US paused plans for 25% tariffs on Mexico and Canada for 30 days after talks with their leaders.
Canada’s prime minister Justin Trudeau reaffirmed a $1.3bn border initiative and pledged to combat fentanyl smuggling, while Mexico’s president Claudia Sheinbaum offered to deploy 10,000 troops to its northern border.
Markets reacted negatively on Monday, with economists warning that Trump’s measures could drive inflation higher and force the Federal Reserve to reconsider its interest rate strategy despite his calls for rate cuts.
UK supermarket sales rise, eurozone inflation ticks higher
On home shores, UK supermarket sales rose 4.3% in the four weeks ended 26 January as grocery price inflation eased to 3.3%, according to Kantar.
Health-conscious spending shaped consumer trends, with shoppers spending £1.2bn on fresh produce, a £193m increase from December.
Sales of low and no-alcohol drinks rose 7% year-on-year, with 6.7% of households purchasing these alternatives.
Retailers responded to shifting demand with increased promotions, which accounted for 27.2% of sales, adding £274m in discount-driven spending.
Lidl and Aldi maintained strong growth, while Tesco led traditional supermarkets with a 5.6% sales increase, its fastest pace since April 2024.
Ocado remained the fastest-growing grocer for the ninth consecutive month, with an 11.3% rise in spending.
On the continent, eurozone inflation ticked up to 2.5% in January from 2.4% in December, driven by rising energy costs, according to a flash estimate from Eurostat.
Energy inflation increased to 1.8% from 0.1% the previous month, while services inflation eased slightly to 3.9%.
Across the Atlantic, US job openings fell sharply in December to 7.6 million, down from 8.2 million in November and marking the lowest level since September.
The decline was driven by reduced demand in finance, business services, and healthcare.
However, new hires rose 1.7% to 5.5 million, while layoffs dropped 1.6% to 1.8 million.
Vodafone slides on Germany market weakness, Entertain in the green
On London’s equity markets, Vodafone Group slumped 7.03% after the telecoms company reported a further revenue decline in its key German market.
Sales in Germany fell 6.4% in the third quarter, extending a 6.2% drop in the previous period, with the company citing the impact of a new state media law.
Despite the weak performance in its largest market, Vodafone maintained its full-year guidance for €11bn in core earnings.
Diageo dropped 1.33% after pulling its medium-term financial guidance in response to incoming US tariffs on Mexican and Canadian imports.
The distilling giant warned that it could not yet quantify the impact of the new duties, which were expected to affect its tequila brands, which must be produced in Mexico, as well as its Canadian whiskey products.
Elsewhere, housebuilder Crest Nicholson fell 6.91% after reporting a pre-tax loss of £143.7m for the year ended October, reversing a £23.1m profit from the prior year.
The company described the period as “very tough and disappointing” as the sector continues to face headwinds.
Mobico Group slipped 1.67% after announcing that its chair, Helen Weir, would step down at the company’s annual general meeting in June.
The transport company, formerly known as National Express, said it had started the search for a successor, with its nominations committee and an external firm overseeing the process.
On the upside, Entain surged 6.21% after its US betting joint venture BetMGM reported stronger revenue and projected a return to profitability.
The business posted a 7% rise in net revenue to $2.1bn for 2024, with iGaming revenue jumping 13% to $1.5bn.
While the company recorded an EBITDA loss of $244m for the year due to investment spending and customer-favorable sports results, it said it expected to achieve positive EBITDA in 2025.
Wizz Air ascended 0.97% after announcing it carried 4.93 million passengers in January, a 4% increase from a year earlier.
The low-cost airline said its seat capacity was down slightly, but a stronger load factor of 86%, up from 82% last year, helped offset the decline.
It also highlighted that a favorable yield environment and booking profile continued into January.
In broker note action, Dunelm Group climbed 1.61% after RBC Capital Markets upgraded the stock to ‘outperform’ from ‘sector perform,’ while SSP Group lost 1.06% after receiving a downgrade from the same broker.
Barratt Redrow initially gained after JPMorgan placed the stock on ‘positive catalyst watch’ ahead of its upcoming capital markets day on 12 February, but later reversed course to close 0.4% lower.
The bank said it expected the company to provide greater clarity on its mid-term objectives following its merger with Redrow, a move it believes investors are anticipating.
Reporting by Josh White for Sharecast.com.
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