FTSE 100 Declines Amid US Tariff Concerns and Corporate Developments
UK's leading stock index reacts to US trade policy as companies navigate mergers and technology challenges.
The FTSE 100 index fell by 73 points, or 0.8%, settling at 8,682 on Thursday, reflecting investor anxiety over the implications of recent U.S. tariff announcements.
This drop followed U.S. President Trump's continuation of a hardline trade agenda directed at Canada, Mexico, and China.
Earlier in the week, European stocks experienced a minor boost when Trump exempted car manufacturers from tariffs on Canada and Mexico.
However, lingering apprehensions regarding the broader economic ramifications of U.S. trade policy persisted.
Analysts noted that the absence of negative news did not mitigate the selling pressure as investors recalibrated their portfolios amid ongoing economic and geopolitical uncertainties.
While the FTSE 100 was down, U.S. markets also exhibited downturns; the S&P 500 dropped by 1.1%, and the Dow Jones decreased by 0.6% during the same trading session.
In contrast, some European indices benefitted from the car tariff exemption news, with Germany's DAX rising by 1.6% and France's CAC 40 increasing by 0.3%.
The British pound was relatively stable, trading at approximately 1.2894 against the dollar and down 0.3% against the euro at 1.1911.
In corporate highlights, ITV announced that it would keep “all options open” regarding a potential merger deal valued at £3 billion for its production arm.
Speculation surrounds a possible merger between ITV Studios and All3Media, a business owned by Abu Dhabi-backed investment group RedBird IMI.
ITV's shares surged by 9.7% following the announcement.
Additionally, Barclays Bank disclosed it could be liable for up to £12.5 million in compensation for customers affected by technological outages over the previous two years, particularly an incident at the end of January that disrupted payment services coinciding with key financial deadlines.
Following the announcement, Barclays shares rose by 2.1%.
Among the top gainers in the FTSE 100 were Schroders, which increased by 48p to 428.2p, Admiral Group, rising 145p to 3046p, and Endeavour Mining, up 78p to 1670p.
Conversely, among the biggest fallers were Melrose Industries, down 123.6p to 556.4p, and HSBC, which fell by 47.4p to 881p.
In related news, Rolls-Royce announced a significant reduction in its Chief Executive Tufan Erginbilgic's pay package for 2024, decreasing by nearly £10 million to £4.1 million compared to £13.6 million in 2023. The adjusted pay includes a lower annual incentive package amid changing bonus structures, despite the firm's recent sales growth and an upgraded profit forecast that includes a planned £1 billion stock buyback, the first in a decade.
Further compounding economic concerns, the UK construction sector reported its lowest activity level since May 2020, marked by a sharp decline in housebuilding activities, as indicated by the S&P Global construction purchasing managers' index, which fell to 44.6 in February from 48.1 in January.
This decline coincides with rising cost inflation and weakened demand, as builders faced challenges from high borrowing costs and low consumer confidence.
Lastly, food prices in the UK rose sharply, recording the third-fastest monthly rate in a year, with the British Retail Consortium reporting an increase in essential items like butter, cheese, eggs, and bread.
Overall food inflation reached 2.1% in February, up from 1.6% in January, signaling continued upward pressure on consumer prices.
This drop followed U.S. President Trump's continuation of a hardline trade agenda directed at Canada, Mexico, and China.
Earlier in the week, European stocks experienced a minor boost when Trump exempted car manufacturers from tariffs on Canada and Mexico.
However, lingering apprehensions regarding the broader economic ramifications of U.S. trade policy persisted.
Analysts noted that the absence of negative news did not mitigate the selling pressure as investors recalibrated their portfolios amid ongoing economic and geopolitical uncertainties.
While the FTSE 100 was down, U.S. markets also exhibited downturns; the S&P 500 dropped by 1.1%, and the Dow Jones decreased by 0.6% during the same trading session.
In contrast, some European indices benefitted from the car tariff exemption news, with Germany's DAX rising by 1.6% and France's CAC 40 increasing by 0.3%.
The British pound was relatively stable, trading at approximately 1.2894 against the dollar and down 0.3% against the euro at 1.1911.
In corporate highlights, ITV announced that it would keep “all options open” regarding a potential merger deal valued at £3 billion for its production arm.
Speculation surrounds a possible merger between ITV Studios and All3Media, a business owned by Abu Dhabi-backed investment group RedBird IMI.
ITV's shares surged by 9.7% following the announcement.
Additionally, Barclays Bank disclosed it could be liable for up to £12.5 million in compensation for customers affected by technological outages over the previous two years, particularly an incident at the end of January that disrupted payment services coinciding with key financial deadlines.
Following the announcement, Barclays shares rose by 2.1%.
Among the top gainers in the FTSE 100 were Schroders, which increased by 48p to 428.2p, Admiral Group, rising 145p to 3046p, and Endeavour Mining, up 78p to 1670p.
Conversely, among the biggest fallers were Melrose Industries, down 123.6p to 556.4p, and HSBC, which fell by 47.4p to 881p.
In related news, Rolls-Royce announced a significant reduction in its Chief Executive Tufan Erginbilgic's pay package for 2024, decreasing by nearly £10 million to £4.1 million compared to £13.6 million in 2023. The adjusted pay includes a lower annual incentive package amid changing bonus structures, despite the firm's recent sales growth and an upgraded profit forecast that includes a planned £1 billion stock buyback, the first in a decade.
Further compounding economic concerns, the UK construction sector reported its lowest activity level since May 2020, marked by a sharp decline in housebuilding activities, as indicated by the S&P Global construction purchasing managers' index, which fell to 44.6 in February from 48.1 in January.
This decline coincides with rising cost inflation and weakened demand, as builders faced challenges from high borrowing costs and low consumer confidence.
Lastly, food prices in the UK rose sharply, recording the third-fastest monthly rate in a year, with the British Retail Consortium reporting an increase in essential items like butter, cheese, eggs, and bread.
Overall food inflation reached 2.1% in February, up from 1.6% in January, signaling continued upward pressure on consumer prices.
