London close: Stocks stay lower on Trump tariff concerns

The FTSE 100 index fell 0.4% to finish at 8,258.61 points, while the FTSE 250 dropped 0.87% to 20,568.65 points.

In currency markets, sterling was last down 0.14% on the dollar to trade at $1.2550, while it inched up 0.02% against the euro, changing hands at €1.1976.

“President-elect Trump's announcement to impose additional tariffs of 10% on Chinese goods and 25% on Mexican and Canadian products briefly pushed the US dollar higher before it gave back its gains,” said IG senior analyst Axel Rudolph.

“Uncertainty now lies in whether China will retaliate.

“While Asian and European stock markets traded lower, US indices painted a mixed picture amid disappointing US housing data.”

Rudolph noted that US new home sales recorded their largest drop in 11 years, while house prices showed their smallest increase in a year.

“The oil price rose by around a percentage point and regained some of Monday's losses as Israel fires further missiles at Beirut ahead of a now likely Hezbollah-Israel ceasefire agreement.

“Precious metal prices such as gold and silver also regained lost ground.”

Trump tariff talk hogs the headlines, UK shop prices decline more slowly

At the top of the economic agenda was the announcement from US president-elect Donald Trump that he was planning to impose sweeping tariffs on imports from China, Mexico, and Canada, aiming to curb illegal immigration and drug trafficking.

Goods from Canada and Mexico would apparently face a 25% tariff, while China would see a 10% levy until it addressed illegal fentanyl exports to the US.

The tariffs, targeting three of America’s largest trading partners, were expected to escalate trade tensions and potentially raise consumer prices.

On home shores, UK shop prices continued to decline in November, but at a slower pace, indicating potential inflationary pressures.

The BRC-NielsenIQ Shop Price Index showed a 0.6% annual drop, compared to October’s 0.8% deflation.

Food inflation eased slightly to 1.8%, its lowest rate in two years, though fresh food prices edged higher.

Non-food prices remained in deflation, with a 1.8% year-on-year drop, reflecting ongoing cost pressures.

“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.”

Elsewhere, UK retailer sentiment weakened significantly, according to the Confederation of British Industry.

Retail sales volumes fell by 18% in November, the steepest drop in two years, with further declines anticipated in December.

Business sentiment for the next three months also deteriorated, reaching its lowest level in a year, although selling price inflation remained subdued.

“Retailers continue to report disappointing sales, though trading conditions have shown some improvement since the middle of the year,” said CBI lead economist Ben Jones.

“Yet the last time retailers felt this gloomy was back in November 2022, at the peak of the inflation shock.

“This makes the sharp decline in sentiment this month all the more telling.”

Across the Atlantic, the S&P CoreLogic Case-Shiller 20-city home price index revealed a continued slowdown in US house price inflation.

Prices in September rose 4.6% annually, the slowest pace in a year and below expectations.

New York, Cleveland, and Chicago recorded the highest gains, while Denver saw minimal growth.

Cranswick slides, Halfords jumps despite lower profit

On London’s equity markets, food producer Cranswick saw its shares drop 3.75%, despite reaffirming full-year guidance and reporting higher interim profits and revenue.

The company cited “healthy” demand, but failed to impress investors.

Similarly, electrical retailer AO World fell 0.73%, reversing earlier gains even after upgrading its full-year forecasts following a surge in interim earnings.

On the upside, Melrose Industries soared 7.21% after JPMorgan Cazenove raised its price target on the stock to 850p from 650p, citing a “positive catalyst watch” ahead of its full-year results in March.

Caterer Compass Group added 1.02% as it posted a 16% jump in full-year operating profit and announced a nearly 14% dividend hike.

Testing company Intertek Group rose 3.46% after upgrading its annual guidance and reporting a 6.6% increase in like-for-like revenue for the four months to the end of October.

Utilities provider Telecom Plus gained 2.16% after it reiterated full-year guidance and targeted a 13% dividend increase, buoyed by strong customer growth despite lower energy revenues.

Elsewhere, retailer Halfords Group surged 14.71% by the close, even after it reported a decline in interim profit and revenue and flagged increased costs from National Insurance and minimum wage changes.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,258.61 -0.40%
FTSE 250 (MCX) 20,568.65 -0.87%
techMARK (TASX) 4,696.58 -0.29%

FTSE 100 - Risers

Melrose Industries (MRO) 567.60p 7.66%
Intertek Group (ITRK) 4,662.00p 3.32%
Imperial Brands (IMB) 2,600.00p 1.40%
Scottish Mortgage Inv Trust (SMT) 948.00p 1.39%
WPP (WPP) 853.40p 1.28%
Pershing Square Holdings Ltd NPV (PSH) 3,678.00p 1.27%
Sage Group (SGE) 1,310.50p 1.20%
Compass Group (CPG) 2,680.00p 1.02%
Smiths Group (SMIN) 1,764.00p 0.97%
Entain (ENT) 804.20p 0.93%

FTSE 100 - Fallers

Beazley (BEZ) 756.00p -3.57%
Intermediate Capital Group (ICG) 2,054.00p -3.48%
Glencore (GLEN) 378.75p -2.83%
Rentokil Initial (RTO) 402.70p -2.47%
Lloyds Banking Group (LLOY) 53.42p -2.27%
Prudential (PRU) 643.00p -2.10%
Weir Group (WEIR) 2,172.00p -2.07%
Halma (HLMA) 2,705.00p -2.06%
Persimmon (PSN) 1,262.00p -1.90%
Rio Tinto (RIO) 4,924.50p -1.82%

FTSE 250 - Risers

Bakkavor Group (BAKK) 134.50p 3.46%
Burberry Group (BRBY) 928.60p 3.09%
Telecom Plus (TEP) 1,798.00p 2.04%
BH Macro Ltd. GBP Shares (BHMG) 396.00p 1.80%
Genus (GNS) 1,710.00p 1.79%
Helios Towers (HTWS) 98.50p 1.76%
Edinburgh Worldwide Inv Trust (EWI) 178.00p 1.25%
St James's Place (STJ) 856.50p 1.00%
Carnival (CCL) 1,815.50p 0.97%
Clarkson (CKN) 3,895.00p 0.78%

FTSE 250 - Fallers

Wood Group (John) (WG.) 55.05p -4.76%
Just Group (JUST) 140.80p -4.61%
Close Brothers Group (CBG) 207.60p -3.80%
Cranswick (CWK) 4,880.00p -3.75%
CMC Markets (CMCX) 264.00p -3.65%
Wizz Air Holdings (WIZZ) 1,313.00p -3.60%
Aston Martin Lagonda Global Holdings (AML) 108.50p -3.47%
Renewi (RWI) 560.00p -3.28%
XPS Pensions Group (XPS) 360.00p -3.23%
Pennon Group (PNN) 580.00p -3.17%