London open: Stocks flat as investors continue to mull Trump tariffs

London stocks were steady in early trade on Wednesday as investors continued to mull the implications of Trump’s news tariffs and ahead of a key US inflation reading.

At 0850 GMT, the FTSE 100 was flat at 8,256.49.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said market participants were still piecing through the potential ramifications of Trump’s "punishing" tariff plans for the global economy.

She said investors were showing "wariness about the implications for worldwide trade but remain hopeful that the worst scenarios may not materialise".

"There is speculation that the bruising duties Donald Trump has outlined are his gauntlet thrown down to spark the start of negotiations rather than a considered policy map," she said.

"Stocks on Wall Street reached fresh ground, as investors shrugged off concerns that his plans will spark new trade wars around the world, expecting in reality the measures will be toned down significantly."

Streeter also pointed to an easing of geopolitical tensions in the Middle East after a ceasefire was agreed between Israel and Hezbollah, which she said "appears to have helped risk appetite".

Looking ahead to the rest of the day, the US PCE is due at 1330 GMT.

Patrick Munnelly at Tickmill Group said: "The October PCE report will be released later today. Expect headline PCE to climb 0.2% m/m, or 2.3% y/y vs. 2.1% in September. Core prices to climb 0.3% m/m and 2.8% y/y from 2.7%. Both metrics are above the inflation objective, and core PCE would exceed the 2.6% Fed forecast in the latest Summary of Economic Projections for this year. That may be the Q4/Q4 change, so there is more wood to chop, but base effects suggest that core PCE will overshoot that forecast.

"Disinflation appears to have stopped according to recent forecasts. That would match market estimates that the Fed will suspend its easing cycle in December (only 40% probability of another 25bps drop).

"However, markets believe the Fed still views policy settings as too restrictive, and next year would be a better time to assess the outlook, supported by the FOMC's assumptions revisions at the December meeting and before Trump's inauguration. Trading activity is expected to decrease further as Thursday marks the beginning of a four-day Thanksgiving weekend for many in the United States."

In equity markets, low-cost airline easyJet flew higher as it reported a surge in full-year profit and boosted its dividend on strong summer demand and a narrowing of winter losses. The company posted a 34% rise in pre-tax profit to £610m. The dividend was lifted to 12.1p a share from 4.5p.

BA and Iberia owner IAG also rose.

Auction Technology surged on the back of well-received full-year results and an upbeat outlook.

On the downside, Pets at Home tumbled as it cut its full-year outlook, highlighting a "subdued" market.

Johnson Matthey slumped as it reported a drop in sales and profits for the six months to September end, weighed down by the "challenging" macroeconomic backdrop.

Aston Martin slid after the car maker raised £210m through share and private debt placings to support its growth and investment strategy and shore up its balance sheet, one day after announcing its second profit warning within two months.

Pennon was a little weaker as it said it swung to a loss in the first half as restructuring costs and investments weighed on the bottom line.

Market Movers

FTSE 100 (UKX) 8,256.49 -0.03%
FTSE 250 (MCX) 20,572.27 0.02%
techMARK (TASX) 4,690.17 -0.14%

FTSE 100 - Risers

Anglo American (AAL) 2,426.50p 2.28%
easyJet (EZJ) 550.80p 1.92%
BT Group (BT.A) 157.95p 1.15%
International Consolidated Airlines Group SA (CDI) (IAG) 255.70p 1.11%
Melrose Industries (MRO) 573.60p 1.06%
Coca-Cola HBC AG (CDI) (CCH) 2,842.00p 0.92%
Marks & Spencer Group (MKS) 379.30p 0.90%
Rentokil Initial (RTO) 406.30p 0.89%
Pershing Square Holdings Ltd NPV (PSH) 3,710.00p 0.87%
Glencore (GLEN) 381.80p 0.81%

FTSE 100 - Fallers

Flutter Entertainment (DI) (FLTR) 21,680.00p -1.32%
Barclays (BARC) 257.80p -1.21%
NATWEST GROUP (NWG) 387.10p -1.12%
Scottish Mortgage Inv Trust (SMT) 938.40p -1.01%
Croda International (CRDA) 3,498.00p -0.79%
InterContinental Hotels Group (IHG) 9,804.00p -0.65%
Compass Group (CPG) 2,663.00p -0.63%
3i Group (III) 3,634.00p -0.63%
Whitbread (WTB) 2,860.00p -0.63%
BAE Systems (BA.) 1,290.00p -0.62%

FTSE 250 - Risers

Auction Technology Group (ATG) 482.00p 9.42%
Foresight Group Holdings Limited NPV (FSG) 460.00p 4.55%
BH Macro Ltd. GBP Shares (BHMG) 407.50p 2.90%
Close Brothers Group (CBG) 212.00p 2.71%
Fidelity China Special Situations (FCSS) 209.00p 2.20%
Games Workshop Group (GAW) 13,700.00p 2.01%
Indivior (INDV) 866.50p 1.94%
Essentra (ESNT) 149.00p 1.92%
Foresight Solar Fund Limited (FSFL) 81.90p 1.87%
C&C Group (CDI) (CCR) 150.40p 1.62%

FTSE 250 - Fallers

Pets at Home Group (PETS) 253.20p -8.59%
Johnson Matthey (JMAT) 1,392.00p -6.76%
Aston Martin Lagonda Global Holdings (AML) 103.40p -4.17%
Kainos Group (KNOS) 797.00p -2.45%
Edinburgh Worldwide Inv Trust (EWI) 174.20p -2.13%
Wood Group (John) (WG.) 54.10p -1.73%
JTC (JTC) 986.00p -1.60%
Herald Investment Trust (HRI) 2,290.00p -1.51%
Harworth Group (HWG) 167.50p -1.47%
The Global Smaller Companies Trust (GSCT) 162.40p -1.34%