London pre-open: Stocks set for big drop after Trump broadens China tariffs
NATWEST GROUP
307.40p
16:40 26/04/24
Stocks are set for a sharply lower start to the trading day after the US President announced that in September the US would start to impose a 10.0% tariff on the remaining $300.0bn-worth of Chinese exports that were not yet subject to trade levies.
Banks
4,061.31
16:59 26/04/24
FTSE 100
8,139.83
17:09 26/04/24
FTSE 350
4,470.09
16:59 26/04/24
FTSE All-Share
4,423.59
17:14 26/04/24
The news saw Wall Street's main market gauges finish the session down by nearly one percentage point having earlier risen by nearly the same amount.
Donald Trump later added that the new tariffs would be implemented in phases and that as talks progressed they could be either raised or lowered.
It was a similar story in commodity markets, which deepened their losses, save for gold futures, which quickly reversed course to head higher.
Commenting on Donald Trump's decision, CMC Markets UK's Michael Hewson said:"Anyone trying to determine the next move in stock markets in the last 24 hours would be justified in feeling like they’ve just experienced a bit of whiplash.
"It is not hard to underestimate how much this abrupt escalation has caught markets unawares. After the deadlock over the summer, there was optimism that once China and the US sat down there would at least be a short period of a ceasefire while both sides restated their respective positions.
"Unfortunately, President Trump doesn’t operate to a specific type of playbook, and yesterday’s actions, while reckless and likely to backfire horribly, could well give the President the weaker US dollar he clearly wants."
Against that backdrop, the FTSE 100 was being called to start the session 88 points lower to 7,496.
In parallel, Asian markets were getting pumeled, with the Nikkei-225 trading down by 2.11% to 21,087.16 and the Shanghai Stock Exchange's Composite Index off by 1.27% at 2,871.93.
No major UK economic releases were scheduled for Friday.
For later in the session, investors were waiting on the latest monthly US jobs numbers, alongside readings on America's foreign trade, durable goods, and consumer confidence.
RBS warns of tough times ahead, IAG profits drop
RBS announced a second special dividend but warned of tough times ahead as the interest rate curve shifts lower and due to Brexit, weighing on its shares.
The majority state-owned lender said it would pay a special dividend of 12.0p, on top of the ordinary interim payout 2.0p.
However, in remarks to Bloomberg TV, the lender's finance chief, Katie Murray, said the less favourable environment would make it harder for the lender to hit its profitability targets and that management was focused on what it could control, namely on continuing to lend and keeping a lid on costs.
Interim operating profits at British Airways owner IAG fell to €1bn from €1.1bn as passenger revenue rose to €10.6bn from €9.9bn a year earlier. Fuel unit costs for the second quarter rose 12.4% or 6.3% on a constant currency basis. The company said it expected 2019 operating profit before exceptional items to be in line with 2018 pro forma at current fuel prices and exchange rates.
BT Group's first quarter profit before tax dropped by 8% to £642m as revenue was dragged lower by falls from its consumer, enterprise and global divisions. Network investment also shot 15% higher to £494m as the UK telecoms giant poured funds into its Broadband Delivery UK and Fibre Cities programmes, as well as launching the UK's first 5G network.
Essentra reported a 1.3% improvement in its revenue on a like-for-like basis in its interim results on Friday, to £507m, although on an actual basis that figure was down 1%. The FTSE 250 plastics and fibre products provider said its adjusted operating profit up 9.6% at constant currency to £48.3m for the six months ended 30 June, after applying IFRS 16. Adjusted basic earnings per share were 7.5% higher at constant currency, at 12.0p, with the board declaring a half-year dividend of 6.3p per share, unchanged year-on-year.