London pre-open: Stocks to slump after heavy US, Asian losses

(Sharecast News) - London stocks were set to slide at the open on Friday following heavy losses on Wall Street and in Asia amid concerns about Donald Trump's tariff threats.

The FTSE 100 was called to open around 50 points lower.

Derren Nathan, head of equity research at Hargreaves Lansdown, said: "FTSE 100 and European futures are pointing to a shaky start for stocks this morning, echoing weak sessions on Wall Street and Asian exchanges.

"Tariffs continue to drive the narrative, and talk of a reprieve for Canada and Mexico has evaporated as next Tuesday's deadline approaches. President Trump has also vowed to slap an additional 10% import duty onto Chinese goods, as he leans heavily on the anti-fentanyl narrative to justify the trade restrictions. The only certainty in this saga is uncertainty, so keep a close eye on developments between now and 4 March.

"Next on the agenda is reciprocal tariffs pencilled in for 2 April with other major US trading partners. The EU, in particular, will be in focus. An amicable start to talks with UK premier Keir Starmer looks to have set the tone for a potential trade deal with the UK but with no details outlined it has not been enough to boost enthusiasm for London listed shares."

Investors will also be mulling the latest data from Nationwide, which showed that house prices rose more than expected in February.

Prices were up 0.4% on the month following a 0.1% increase in January, beating expectations for a 0.2% jump.

On the year, house prices rose 3.9% in February, down from 4.1% the month before.

The average price of a home stood at �270,493, up from �268,213.

Nationwide chief economist Robert Gardner said housing market activity has remained resilient in recent months, despite ongoing affordability challenges.

"Indeed, the second half of 2024 saw a noticeable pick up in total housing transactions, which were up 14% compared with the same period in 2023," he said. "However, taking 2024 as a whole, transactions were still modestly (6%) lower than the levels prevailing before the pandemic struck in 2019.

"In terms of the pattern of transactions, it is notable that first-time buyer activity continued to recover, with mortgage completions in 2024 just 5% below 2019 levels. This represents a solid performance, given the interest rate environment - for example, five-year fixed mortgage rates are currently around 4.4% (for borrowers with a 25% deposit) compared to c2% in 2019.

"Cash transactions remained particularly robust, with activity 2% above pre-pandemic levels."

Looking ahead, Gardner said changes to stamp duty at the start of April are likely to generate volatility in transactions in the near term, as buyers bring forward their purchases to avoid the additional tax.

"This will likely lead to a jump in transactions in March, and a corresponding period of weakness in the following months, as occurred in the wake of previous stamp duty changes."

In corporate news, British Airways owner IAG reported a better-than-expected jump in annual profits after doubling earnings in the final quarter, driven by "robust" leisure travel and said it planned to return a further �1bn to shareholders.

Adjusted operating profit rose 26% to �4.4bn, beating estimates of �4.08bn.

Weir Group reported a 9% improvement in full-year adjusted operating profit in its final results, to �472m, despite revenue for 2024 narrowing by 1% to �2.51bn.

The FTSE 100 company also announced an agreement to acquire mining software specialist Micromine for �657m, in a deal expected to close in the second quarter.

It said it would fund the purchase through existing cash and new debt, with net debt-to-EBITDA anticipated to remain below 2x by the end of 2025 and declining further in 2026.