London open: Stocks fall as Trump announces new tariffs

London stocks fell in early trade on Friday as investors mulled US President Trump's sweeping new tariffs.
At 0830 BST, the FTSE 100 was down 0.5% at 9,084.41.

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. Earnings season has seen some key names release robust numbers with British Airways owner IAG adding to the list of companies that have flown above analyst forecasts."

On home shore, 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."

Gardner said that despite wider economic uncertainties in the global economy, underlying conditions for potential home buyers in the UK remain supportive.

"Unemployment remains low, earnings are still rising at a healthy pace (even after accounting for inflation), household balance sheets are strong and borrowing costs are likely to moderate a little further if Bank Rate is lowered further in the coming quarters as we, and most other analysts, expect," he said.

"Providing the broader economic recovery is maintained, housing market activity is likely to continue to strengthen gradually in the quarters ahead."

In equity markets, 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.

IAG flew higher as the British Airways and Iberia owner's second-quarter revenue and profits beat expectations.

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.

On the downside, Intertek tumbled after first-half results.