London midday: FTSE stays down on Trump tariffs; payrolls eyed

London stocks were still in the red by midday on Friday as investors mulled US President Trump's sweeping new tariffs and eyed the release of the latest non-farm payrolls report.
The FTSE 100 was down 0.5% at 9,086.37.

Derren Nathan, head of equity research at Hargreaves Lansdown, said: "Countries playing tariff poker with Donald Trump have had their bluff called with new US import tax rates announced for 92 nations shortly before the 1 August deadline came into play, with rates ranging from 10% to 41%. Mexico was the only reprieve of note, earning a 90-day extension to agree a deal. China already faces a separate deadline of 12 August.

"The FTSE has dropped back below 9,100 but a little profit taking is to be expected after climbing 4% in July."

On home shore, a survey out earlier showed that activity in the manufacturing sector improved in July, although it remained in contractionary territory.

The S&P Global manufacturing purchasing managers' index rose to a six-month high of 48.0 from 47.7 in June. However, it was below the flash estimate of 48.2 and remained below the 50 mark that separates contraction from expansion for the tenth month.

Four out of the five PMI components - output, new orders, employment and stocks of purchases - remained at levels consistent with a deterioration in overall operating performance.

Rob Dobson, director at S&P Global Market Intelligence, said: "The UK manufacturing sector is starting to send some tentatively encouraging signals, with the downturn moderating in July as factory output came close to stabilising and future output expectations hit the highest since February.

"However, it's clear that there's no assured path back to strong growth. Clients in the home market often remain unwilling to spend due to cost factors such as higher minimum wages and employer NICs, while export markets are being buffeted by geopolitical stresses and trade and tariff uncertainties.

"The biggest concern remains the labour market, with the rate of job cutting through much of 2025 among the steepest since the pandemic year of 2020.

"With the Autumn budget only a few months away, manufacturers will likely remain cautious and focussed on stabilisation while waiting to see if future budget announcements provide much needed support or further challenges to overcome."

Elsewhere, the latest data from Nationwide showed that house prices rebounded in July.

House prices rose 0.6% on the month following a 0.9% decline June. On the year, prices rose 2.4% in July following 2.1% growth the month before.

The average price of a home stood at £272,664 last month, up from £271,619 in June.

Nationwide's chief economist Robert Gardner said: "Looking through the volatility generated by the end of the stamp duty holiday, activity appears to be holding up well. Indeed, 64,200 mortgages for house purchase were approved in June, broadly in line with the pre-pandemic average, despite the changed interest rate environment.

"After deteriorating markedly in the wake of the pandemic, housing affordability has been steadily improving, thanks to a period of strong income growth alongside more subdued house price growth and a modest fallback in mortgage rates."

Looking ahead to the rest of the day, attention will turn to the non-farm payrolls report for July, due at 1330 BST, along with average earnings and the unemployment rate.

HL's Derren Nathan said: "Markets have become increasingly pessimistic about the prospects of a September rate cut by the Fed. Job growth is expected to have slowed to 110,000 in July but anything faster will see the probability of imminent rate cuts diminish further."

In equity markets, AstraZeneca and GSK slumped after Trump sent letters to 17 of the world's biggest pharmaceutical companies demanding "binding commitments" to cut US drug prices.

Watches of Switzerland slid after Trump announced a 39% tariff on Swiss exports to the US, above the 31% announced on so-called Liberation Day.

Elsewhere, Intertek tumbled after first-half results, while IAG flew lower even as the British Airways and Iberia owner's second-quarter revenue and profits beat expectations.

Pets at Home was knocked lower by a downgrade to 'underweight' at Barclays.

On the upside, Melrose Industries surged after the aerospace technology firm delivered a solid first-half report, with adjusted operating profits up by nearly a third.

Educational publisher Pearson rallied after saying it was on track to meet full-year forecasts as it reported a 2% rise in adjusted half-year operating profit.

IMI gained as it reiterated its full-year guidance after a broadly stable first half, with the engineering business hailing "strong momentum" heading into the second half.

Playtech advanced as it lifted it expectations for first-half adjusted earnings before interest, tax, depreciation and amortisation.

Market Movers

FTSE 100 (UKX) 9,086.37 -0.51%
FTSE 250 (MCX) 21,728.33 -1.07%
techMARK (TASX) 5,227.38 -0.99%

FTSE 100 - Risers

Rolls-Royce Holdings (RR.) 1,060.00p 7.29%
Melrose Industries (MRO) 546.40p 6.68%
Pearson (PSON) 1,135.00p 5.83%
Unilever (ULVR) 4,506.00p 2.22%
Haleon (HLN) 366.50p 1.95%
British American Tobacco (BATS) 4,118.00p 1.93%
Airtel Africa (AAF) 206.00p 0.88%
Mondi (MNDI) 1,035.50p 0.78%
Vodafone Group (VOD) 82.64p 0.76%
United Utilities Group (UU.) 1,135.00p 0.67%

FTSE 100 - Fallers

Intertek Group (ITRK) 4,576.00p -7.37%
Rentokil Initial (RTO) 362.80p -4.40%
Weir Group (WEIR) 2,550.00p -4.35%
Anglo American (AAL) 2,085.00p -2.93%
AstraZeneca (AZN) 10,992.00p -2.93%
Scottish Mortgage Inv Trust (SMT) 1,072.50p -2.32%
Flutter Entertainment (DI) (FLTR) 22,580.00p -2.25%
Schroders (SDR) 382.60p -2.15%
St James's Place (STJ) 1,280.50p -2.14%
Pershing Square Holdings Ltd NPV (PSH) 4,154.00p -2.12%

FTSE 250 - Risers

Playtech (PTEC) 407.00p 2.26%
WH Smith (SMWH) 1,036.00p 1.07%
Pollen Street Group Limited (POLN) 852.00p 0.95%
Kier Group (KIE) 198.80p 0.81%
Endeavour Mining (EDV) 2,316.00p 0.78%
Mitie Group (MTO) 141.60p 0.57%
Plus500 Ltd (DI) (PLUS) 3,382.00p 0.48%
Lion Finance Group (BGEO) 7,630.00p 0.33%
Spirent Communications (SPT) 195.60p 0.31%
Man Group (EMG) 165.40p 0.30%

FTSE 250 - Fallers

Watches of Switzerland Group (WOSG) 319.20p -8.96%
Trustpilot Group (TRST) 241.40p -3.83%
Pets at Home Group (PETS) 220.60p -3.58%
Trainline (TRN) 264.40p -3.43%
Great Portland Estates (GPE) 329.00p -3.09%
Oxford Nanopore Technologies (ONT) 198.00p -2.94%
Close Brothers Group (CBG) 391.80p -2.92%
Raspberry PI Holdings (RPI) 399.40p -2.88%
Aston Martin Lagonda Global Holdings (AML) 68.25p -2.57%
Derwent London (DLN) 1,883.00p -2.49%