Key Moments:
- The FTSE 100 opened with gains on Tuesday before retreating. At the time of writing, the index is down 0.15%.
- UK Trade Secretary scheduled meetings to finalize the country’s partial tariff exemption agreement with the US.
- British American Tobacco has forecasted stronger-than-expected full-year revenue performance, but its shares tumbled.
FTSE 100 Falls as Investors Await Clarity on US Tariffs
The FTSE 100 was volatile in early trading hours on Tuesday. It initially started the session with gains, but investor sentiment quickly shifted and pushed the index into negative territory. At one point, the FTSE 100 dropped by around 0.22% and hit 8,754.79 before recovering slightly above the 8,760 mark.
Market sentiment was influenced by a Tuesday meeting between UK Trade Secretary Jonathan Reynolds and US trade representative Jamieson Greer. The talks aim to iron out implementation details of a provisional agreement announced last month, which would exempt the UK from certain American tariffs on cars and steel while offering broader US market access for other UK goods.
The UK Prime Minister previously called the preliminary deal a significant breakthrough, noting that Britain was the first country to reach such an arrangement under President Trump. Officials are hoping for a final agreement within weeks, as Trump’s latest announcement regarding 50% blanket tariffs on steel imports injected a degree of uncertainty into markets.
Meanwhile, investors are also awaiting developments in US-China talks amid speculation that US President Donald Trump and Chinese President Xi Jinping could hold a phone call sometime this week to resume trade discussions. This would be the first confirmed direct communication between the two leaders since Trump’s return to power.
FTSE 100 Highlights
British American Tobacco’s (BAT) shares fell about 0.8% on Tuesday despite the company’s projection of slightly exceeding full-year revenue guidance. BAT anticipates first-half and full-year revenue and profit growth in its US operations, driven by strong combustibles and Velo Plus performance, with new category revenue expected to achieve low-single-digit growth for the first half.
Tadeu Marroco, BAT’s CEO, remarked that despite ongoing tasks, he felt optimistic about the headway they were making by prioritizing quality growth. He additionally noted his satisfaction with the company’s advancements in gaining greater financial flexibility.
Other notable movers include Pearson ORD and Antofagasta PLC, as both fell by over 2%, and the former was at the bottom of the index. As for the index’s top gainers, Centrica managed to advance by 3.31% in early trading.
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