London close: Stocks mixed on US tariffs, Mann comments

(Sharecast News) - London stocks closed mixed on Tuesday after the FTSE 100 touched fresh record highs, as investors weighed the implications of US president Donald Trump's latest tariff comments and remarks from Bank of England policymaker Catherine Mann. The FTSE 100 index edged up 0.11% to close at 8,777.39 points, while the FTSE 250 slipped 0.32% to settle at 20,919.72 points.

In currency markets, sterling was last up 0.46% on the dollar to trade at $1.2425, as it gained 0.08% against the euro, changing hands at €1.2008.

"The US 10-year Treasury yield rising to 4.54% and small business optimism falling from 2018-highs weighed on US stock indices," said IG senior technical analyst Axel Rudolph.

"These halted their losses after Fed President Jerome Powell's speech in which he stated that the central bank is in no hurry to adjust policy as the US economy remains strong overall.

"Meanwhile further inflows into European stocks pushed the FTSE 100 and DAX 40 to yet more record highs."

Rudolph noted that signs of tighter Russian oil supply in addition to increasing supply risks provoked a fourth straight day of gains and over 3% rally in crude prices from last week's one-month low.

"Gold, silver and copper prices fell by between 0.5% and nearly 3% on the day respectively, though, despite a slightly softening US dollar."

Mann inflation comments in focus, retail sales show resilience

At the top of the agenda were comments that the UK economy was expected to remain weak this year, with subdued domestic demand and a softening labour market limiting inflationary pressures, according to Bank of England policymaker Catherine Mann.

Mann - a member of the Monetary Policy Committee since 2021 - was one of two members who voted for a larger 50-basis-point interest rate cut last week, though the majority opted for a smaller 25 basis point reduction, bringing the Bank Rate to 4.5%.

She justified her stance in a statement on Tuesday, citing weaker-than-expected GDP growth and a modest rise in unemployment.

"I judge that the current and likely continued weak demand conditions will lead to a further loosening of the labour market which tends to follow non-linear dynamics," she said.

While inflation was expected to rise to 3.7% in the third quarter of 2025, it was not projected to return to the 2% target until late 2027.

Mann argued that despite cost pressures from rising employer contributions and higher wages, businesses may struggle to pass on these costs.

"This likely soft consumption profile will constrain firms' pricing power and will moderate pass-through of costs," she noted.

Meanwhile, retail sales showed resilience at the start of the year as shoppers took advantage of post-holiday promotions.

According to the British Retail Consortium-KPMG retail sales monitor, total sales rose 2.6% year-on-year in January, slowing from December's 3.2% growth but outpacing the 1.2% gain recorded a year earlier.

The BRC said an earlier reporting period this year added extra post-Christmas trading days, boosting the figures.

However, broader trends remained muted, with three-month average sales growth at just 1.1% and the 12-month average at 0.8%.

Food sales climbed 2.8% year-on-year, while non-food sales increased 2.6%, including a 2.2% rise in online transactions.

"January sales kicked off a solid month for retail with stores delivering their strongest growth in almost two years, albeit on a weak comparable," said the BRC's chief executive, Helen Dickinson.

"Consumers headed to the shops to refresh their homes for the year ahead, taking advantage of big discounts on furniture, bedding and other home accessories.

"With growth across nearly all categories, only toys and baby equipment remained in decline."

Across the Atlantic, small business sentiment in the United States softened in January after reaching a six-year high in December.

The National Federation of Independent Business' optimism index fell to 102.8 from 105.1, missing forecasts of 104.6.

Although still above the long-term average, uncertainty among business owners rose sharply, with the NFIB's uncertainty index jumping 14 points to 100, its third-highest level on record.

Expectations for economic improvement also weakened, with the net balance of business owners predicting better conditions falling to +47% from +52%.

Entain falls on CEO's departure, Ashtead manages gains

On London's equity markets, Entain was in the red after announcing the abrupt departure of its chief executive.

The sports betting and gambling group plunged 11.08% after confirming that Gavin Isaacs had stepped down with immediate effect after just five months in the role.

Entain, which operates brands including Coral, Ladbrokes, and Foxy Bingo, did not provide a reason for the move, stating only that the decision was reached "by mutual agreement".

"Details are scarce, and while Entain used the moment to reassure investors that it's on track to meet 2025 profit expectations, sudden leadership shake-ups rarely go down smoothly - questions will be flying," said Matt Britzman, senior equity analyst at Hargreaves Lansdown.

Travel-related stocks also suffered, with Wizz Air dropping 2.06%, EasyJet losing 2.68%, and cruise operator Carnival falling 3.14%.

The declines followed weak results from travel firm TUI, which raised concerns over consumer spending in the sector.

Housebuilders were under pressure despite Bellway reporting strong first-half growth and reaffirming its full-year guidance.

The stock dropped 4.52% as the company pointed to "sensitivity of customer demand" amid rising mortgage rates.

FTSE 100 peers Persimmon, Barratt Redrow, Taylor Wimpey, and Berkeley also declined, losing between 1.4% and 2.3%.

Miners tracked weaker copper prices, dragging Anglo American down 3.66%, Glencore 3.2%, and Antofagasta 2.02%.

Oil major BP slipped 0.94% after reporting a steep decline in fourth-quarter underlying replacement cost profit, which fell to a four-year low of $1.17bn from $2.99bn a year earlier.

"It faced seasonal weakness, ongoing challenges at its refineries and downtime due to maintenance work," said Derren Nathan, head of equity research at Hargreaves Lansdown.

"This was well trailed in prior guidance, so shouldn't come as much of a surprise.

"Free cash flow was the ray of light that burst through the clouds, rising from $2.2bn to $3.7bn over the quarter, underpinning a further quarterly share buyback of $1.75bn and dispelling some speculation of a drop in shareholder payouts."

On the upside, Ashtead Group inched 0.16% higher after reaffirming plans to pursue a primary listing in the United States.

PRS REIT gained 3.3% after declaring a higher interim dividend of 1.1p per share for the second quarter, citing continued rental and earnings growth.

The real estate investment trust has now declared total dividends of 2.1p per share for the first half, fully covered by EPRA earnings.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,777.39 0.11% FTSE 250 (MCX) 20,919.72 -0.32% techMARK (TASX) 4,740.73 -0.27%

FTSE 100 - Risers

Intertek Group (ITRK) 5,260.00p 3.14% Diploma (DPLM) 4,612.00p 2.58% JD Sports Fashion (JD.) 85.70p 2.34% Shell (SHEL) 2,699.50p 2.27% BAE Systems (BA.) 1,205.00p 2.08% Pershing Square Holdings Ltd NPV (PSH) 4,450.00p 1.92% Standard Chartered (STAN) 1,125.00p 1.90% NATWEST GROUP (NWG) 448.80p 1.68% Compass Group (CPG) 2,796.00p 1.64% Hikma Pharmaceuticals (HIK) 2,338.00p 1.30%

FTSE 100 - Fallers

Entain (ENT) 660.00p -11.08% Legal & General Group (LGEN) 238.70p -3.20% Glencore (GLEN) 349.65p -2.73% easyJet (EZJ) 509.20p -2.68% Anglo American (AAL) 2,441.00p -2.46% Whitbread (WTB) 2,744.00p -2.38% Barratt Redrow (BTRW) 437.00p -2.17% Antofagasta (ANTO) 1,798.50p -2.02% Taylor Wimpey (TW.) 117.05p -1.89% InterContinental Hotels Group (IHG) 10,665.00p -1.89%

FTSE 250 - Risers

PRS Reit (The) (PRSR) 112.80p 3.30% GCP Infrastructure Investments Ltd (GCP) 77.40p 3.20% Foresight Group Holdings Limited NPV (FSG) 401.00p 3.08% TBC Bank Group (TBCG) 3,695.00p 2.64% Babcock International Group (BAB) 611.00p 2.52% RS Group (RS1) 651.00p 2.04% SThree (STEM) 257.00p 1.98% Lion Finance Group (BGEO) 4,980.00p 1.94% QinetiQ Group (QQ.) 370.60p 1.42% 4Imprint Group (FOUR) 5,780.00p 1.40%

FTSE 250 - Fallers

Bellway (BWY) 2,430.00p -5.23% Ferrexpo (FXPO) 89.20p -4.29% IP Group (IPO) 48.50p -2.90% Carnival (CCL) 1,873.00p -2.80% Raspberry PI Holdings (RPI) 717.75p -2.79% Wetherspoon (J.D.) (JDW) 598.00p -2.61% Bytes Technology Group (BYIT) 461.60p -2.53% Ashmore Group (ASHM) 162.80p -2.46% Mobico Group (MCG) 70.05p -2.44% ITV (ITV) 75.75p -2.32%