London open: Stocks fall on Trump's tariff plans

London stocks fell in early trade on Tuesday after Donald Trump announced plans to impose tariffs against Canada, Mexico and China.

At 0850 GMT, the FTSE 100 was down 0.5% at 8,251.77.

Trump said that from 20 January, he will impose a 25% tariff on all goods coming from Mexico and Canada as he looks to clamp down on illegal immigration and drugs, and an additional 10% tariff on China.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said news of Trump’s tariffs "sent shockwaves through global sentiment".

"The President-elect’s scorched-earth approach has stoked fears of a trade war, with investors increasingly wary that Europe could be next in his crosshairs," he said. "The FTSE 100 is feeling the effects and, after a run of three sessions on the rise and posting its highest level in a month yesterday, opened 0.3% lower this morning."

On home shores, the latest BRC-NielsenIQ Shop Price Index showed that shop prices in the UK continued to decline in November, but the rate of deflation slowed, signalling a potential shift in inflationary trends.

Prices fell 0.6% year-on-year during the first week of November, a slight increase from October’s 0.8% deflation and marginally above the three-month average of -0.7%.

Annual shop price growth remained at its lowest since September 2021.

"November was the first time in 17 months that shop price inflation has been higher than the previous month, albeit remaining overall in negative territory," said British Retail Consortium chief executive Helen Dickinson.

"Food prices increased for fresh products such as seafood, which is more vulnerable to high import and processing costs, especially during winter.

"Tea prices also remained high as poor harvests in key producing regions continued to impact supply."

In equity markets, Melrose Industries shot to the top of the FTSE 100 as JPMorgan Cazenove hiked its price target on the shares to 850p from 650p and opened a "positive catalyst watch" ahead of full-year results in March.

Intertek gained as the testing laboratories company upgraded annual guidance as it reported a 6.6% jump in like-for-like revenue for the four months to 30 October.

Electrical retailer AO World was in the back as it lifted full-year forecasts after a surge in interim earnings.

The company said it now expected adjusted profit before tax of £39m to £44m, compared with the previous range of £36m to £41m. Interim profits for the six months to 30 September rose 30% to £17m despite a tough summer hit by lower pricing and weak demand for cooling products.

On the downside, caterer Compass Group fell after full-year results, while Ithaca Energy was knocked lower by a downgrade to ‘hold’ at HSBC.

Market Movers

FTSE 100 (UKX) 8,251.77 -0.48%
FTSE 250 (MCX) 20,613.83 -0.65%
techMARK (TASX) 4,710.80 0.01%

FTSE 100 - Risers

Melrose Industries (MRO) 569.60p 8.04%
Intertek Group (ITRK) 4,578.00p 1.46%
Flutter Entertainment (DI) (FLTR) 22,030.00p 0.92%
BT Group (BT.A) 155.90p 0.61%
Tesco (TSCO) 354.20p 0.57%
Vodafone Group (VOD) 71.48p 0.56%
Imperial Brands (IMB) 2,577.00p 0.51%
Sainsbury (J) (SBRY) 254.20p 0.39%
WPP (WPP) 845.00p 0.28%
Relx plc (REL) 3,712.00p 0.27%

FTSE 100 - Fallers

JD Sports Fashion (JD.) 100.00p -2.72%
Diageo (DGE) 2,340.50p -2.58%
Lloyds Banking Group (LLOY) 53.56p -2.01%
Vistry Group (VTY) 647.00p -1.90%
Weir Group (WEIR) 2,176.00p -1.89%
Prudential (PRU) 644.40p -1.89%
Compass Group (CPG) 2,603.00p -1.88%
NATWEST GROUP (NWG) 387.50p -1.80%
Spirax Group (SPX) 6,800.00p -1.73%
Frasers Group (FRAS) 751.00p -1.44%

FTSE 250 - Risers

AO World (AO.) 112.60p 2.74%
Jupiter Fund Management (JUP) 85.00p 2.16%
Telecom Plus (TEP) 1,800.00p 2.16%
Genus (GNS) 1,702.00p 1.31%
Indivior (INDV) 862.50p 1.05%
Hochschild Mining (HOC) 214.50p 0.94%
Alpha Group International (ALPH) 2,240.00p 0.90%
Foresight Group Holdings Limited NPV (FSG) 449.00p 0.90%
PayPoint (PAY) 824.00p 0.73%
Greencoat UK Wind (UKW) 127.90p 0.55%

FTSE 250 - Fallers

Ithaca Energy (ITH) 112.70p -3.34%
PureTech Health (PRTC) 165.00p -3.17%
Close Brothers Group (CBG) 210.40p -2.50%
Ocado Group (OCDO) 321.20p -2.46%
Watches of Switzerland Group (WOSG) 462.00p -2.37%
WH Smith (SMWH) 1,229.00p -2.31%
Elementis (ELM) 133.40p -2.20%
HGCapital Trust (HGT) 535.00p -2.19%
Workspace Group (WKP) 547.00p -2.15%
Dr. Martens (DOCS) 58.70p -2.09%