London open: FTSE falls again as China retaliates against US

(Sharecast News) - London stocks were lower again in early trade on Tuesday following heavy losses a day earlier, after China announced retaliatory tariffs on a range of US imports. At 0820 GMT, the FTSE 100 was down 0.3% at 8,554.05, having tumbled on Monday after US President Donald Trump announced over the weekend that he would impose 25% tariffs on imports from Canada and Mexico, and an additional 10% tariff on China.

On Tuesday, just as the US tariffs on China took effect, the Finance Ministry there said it was imposing tariffs of 15% for US coal and liquefied natural gas and 10% for crude oil, farm equipment and some autos. It also announced a probe into Google.

Meanwhile, Trump has agreed to pause the implementation of 25% tariffs on Canada and Mexico for 30 days.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: "UK stocks are set for a rocky start as trade tensions continue to dictate the market mood. China hit back with tariffs on US goods, including oil and gas, just as fresh US levies on Chinese imports kicked in. Meanwhile, Trump hit the brakes on tariffs for Mexico and Canada but kept Europe on edge with lingering threats.

"With markets on a tariff tightrope, volatility looks set to stick around - but for those willing to ride the waves, there may be chances to cash in on overreactions, especially if Trump's tariff bark proves worse than his bite."

In equity markets, drinks company Diageo slumped as it pulled its medium-term guidance ahead of incoming tariffs on Mexican and Canadian imports by the Trump administration, saying it cannot yet accurately predict how additional duties will affect its financial performance.

Diageo's tequila portfolio, which given geographic origin requirements must be made in Mexico, and also its Canadian whisky brands would be mainly affected by the protectionist measures.

Vodafone was sharply lower after it reported another revenue decline in its key German market, denting a solid overall third-quarter performance across other regions.

The telecoms firm said German sales were down 6.4% in the period, compared with a 6.2% decline in the previous three months, primarily due to the impact of a new state media law. Despite the fall Vodafone reiterated full year guidance of €11bn in core earnings.

Crest Nicholson slid as the housebuilder said it swung to a pre-tax loss of £143.7m in the year to the end of October 2024 from a profit of £23.1m a year earlier, calling it a "very tough and disappointing year".

In broker note action, Dunelm was boosted by an upgrade to 'outperform' from 'sector perform' at RBC Capital Markets, but SSP was knocked lower by a downgrade to 'sector perform' from 'outperform' by the same outfit.

Market Movers

FTSE 100 (UKX) 8,554.05 -0.34% FTSE 250 (MCX) 20,654.51 -0.28% techMARK (TASX) 4,698.45 -0.45%

FTSE 100 - Risers

Glencore (GLEN) 345.95p 1.13% F&C Investment Trust (FCIT) 1,172.00p 1.03% Standard Chartered (STAN) 1,072.00p 0.85% International Consolidated Airlines Group SA (CDI) (IAG) 343.40p 0.82% Scottish Mortgage Inv Trust (SMT) 1,050.00p 0.82% Barclays (BARC) 292.65p 0.72% HSBC Holdings (HSBA) 827.20p 0.68% Rolls-Royce Holdings (RR.) 598.80p 0.57% Rio Tinto (RIO) 4,860.00p 0.51% Alliance Witan (ALW) 1,296.00p 0.47%

FTSE 100 - Fallers

Diageo (DGE) 2,303.50p -2.60% Reckitt Benckiser Group (RKT) 5,176.00p -2.41% Flutter Entertainment (DI) (FLTR) 20,920.00p -1.88% Rentokil Initial (RTO) 387.30p -1.35% BP (BP.) 414.75p -1.25% Intertek Group (ITRK) 5,010.00p -0.99% Unilever (ULVR) 4,595.00p -0.91% JD Sports Fashion (JD.) 84.20p -0.89% Rightmove (RMV) 660.80p -0.87% AstraZeneca (AZN) 11,184.00p -0.82%

FTSE 250 - Risers

Oxford Instruments (OXIG) 2,155.00p 4.61% JTC (JTC) 1,000.00p 4.17% Supermarket Income Reit (SUPR) 69.10p 3.75% Harworth Group (HWG) 173.00p 2.67% Indivior (INDV) 967.50p 2.65% Raspberry PI Holdings (RPI) 749.00p 2.32% Volution Group (FAN) 540.00p 2.27% Mony Group (MONY) 195.00p 1.83% Future (FUTR) 919.50p 1.55% Fidelity China Special Situations (FCSS) 234.00p 1.52%

FTSE 250 - Fallers

Moonpig Group (MOON) 215.50p -4.65% Foresight Solar Fund Limited (FSFL) 68.00p -3.82% Auction Technology Group (ATG) 583.00p -3.48% Grafton Group Ut (CDI) (GFTU) 889.00p -2.96% Crest Nicholson Holdings (CRST) 170.00p -2.91% Bridgepoint Group (Reg S) (BPT) 369.60p -2.74% SThree (STEM) 246.50p -2.57% TBC Bank Group (TBCG) 3,280.00p -2.53% Mobico Group (MCG) 70.05p -2.44% Clarkson (CKN) 4,205.00p -2.44%