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The Independent
2 hours ago
- Business
- The Independent
FTSE 100 climbs as earnings cascade brings cheer
The FTSE 100 made strong progress on Tuesday, boosted by results from AstraZeneca and Barclays, but it was a gloomy day for investors in Novo Nordisk. Russ Mould, of AJ Bell, said: 'It's a busy week for corporate earnings in the UK and US, and investors have plenty of news to digest. The latest set of UK results was generally well-received.' The FTSE 100 index closed up 54.88 points, 0.6%, at 9,136.32. The index had earlier traded as high as 9,163.24. The FTSE 250 closed 158.73 points lower, 0.7%, at 21,793.07, and the AIM All-Share closed down 7.27 points, 0.9%, at 765.75. In London, investors weighed a barrage of earnings with shares of AstraZeneca, Barclays, Games Workshop and Entain moving higher, although Croda International struggled. Games Workshop led the way, up 5.4%, as it said pre-tax profit jumped 29% to £262.8 million in the financial year that ended June 1 from £203 million a year ago. The Nottingham, England-based fantasy game figurine maker and retailer said revenue rose 17% to £617.5 million from £525.7 million. Reflecting the strong earnings, the total dividend was £5.20, up 24% from £4.20 the year before. AstraZeneca, the largest FTSE 100 constituent, rose 3.4%. The Cambridge, England-based pharmaceuticals company said pre-tax profit jumped 30% to 3.13 billion dollars in the second quarter of 2025 from 2.4 billion dollars a year prior, or by 34% at constant currency. Revenue rose 12% to 14.46 billion dollars in the quarter from 12.94 billion dollars a year ago, or by 11% at constant currency, ahead of Visible Alpha's consensus of 14.31 billion dollars. Sales were driven by double-digit growth in Oncology and BioPharmaceuticals, with increases across all major geographic regions. Entain climbed 0.8% as it raised guidance at its BetMGM joint venture, while Barclays advanced 2.5% after well-received results and despite a lack of a guidance hike. Bank of America said Barclays printed a 'good' set of results, with underlying profit around 11% above consensus, driven primarily by higher income (particularly non-interest income) and lower impairments. But Croda International was down 10%. The speciality chemicals maker posted improved revenue for the first half, though impairments limited its bottom line. Croda's pre-tax profit in the first half of 2025 fell 19% to £85.5 million from £106.1 million, despite revenue improving 4.9% to £855.8 million from £815.9 million. Adjusted pre-tax profit rose 8.4%, however, to £138 million from £127.3 million. Revenue fell slightly short of the company-compiled consensus of £857 million. It beat on profit, however, as the adjusted pre-tax profit consensus stood at £136.6 million. The upbeat mood spread to Europe. The CAC 40 in Paris rose 0.7%, while the DAX 40 in Frankfurt advanced 1%. However, Denmark's Novo Nordisk plunged 23% as it lowered full-year sales and profit guidance, citing weaker-than-expected uptake of key weight-loss and diabetes treatments in the US. Novo Nordisk lowered its 2025 sales growth guidance to between 8% and 14%, down from 13% to 21%. It now expects operating profit growth of 10% to 16%, reduced from a previous range of 16% to 24%. The company blamed slower-than-expected Wegovy uptake in the US obesity market, compounded by ongoing sales of compounded GLP-1s, a more competitive landscape for Ozempic in the US, and lower-than-expected Wegovy penetration in select international markets. Analysts at Jefferies said the 2025 outlook cut suggests high single-digit percentage underlying profit forecast downgrades. In New York on Tuesday, the Dow Jones Industrial Average was down 0.3%, the S&P 500 was 0.1% lower, as was the Nasdaq Composite. A report from the Conference Board showed a slight pickup in consumer confidence, albeit from low levels, while another release showed a larger-than-expected drop in job openings. On Wednesday, the Federal Reserve is widely expected to leave interest rates unchanged. According to the CME FedWatch Tool, it is near-certain that the Fed will maintain rates at the 4.25%-4.5% range this week. The Fed held in each of the first four meetings this year. Its last cut was in December, a 25 basis points trim to the federal funds rate range. A fifth successive hold is in the offing during the final meeting before a summer break. A 'wait and see' approach will likely be the message from chairman Jerome Powell at the subsequent press conference, analysts at Morgan Stanley predict. 'We think chair Powell will remain balanced, acknowledging both upside risks to inflation and the projections for rate cuts later this year,' Morgan Stanley analysts said. Attention will focus on any dissent in the ranks of the Federal Open Market Committee, where Governors Michelle Bowman and Christopher Waller may back a rate cut. Meanwhile, Chinese and US delegations met for their second day of trade negotiations in Stockholm, with both sides said to be aiming to extend a truce due to end in two weeks' time. Neither side has so far made public any information about what has gone on in the talks, which started on Monday. Joshua Mahony at Rostro said: 'There is an expectation that an extension to the tariff deadline with China will open a pathway for Xi Jinping and Donald Trump to meet in person, heightening hopes for an impending trade deal between the world's two largest economies.' The pound eased to 1.3337 dollars late on Tuesday afternoon in London, compared to 1.3403 dollars at the equities close on Monday. The euro traded at 1.1537 dollars, lower against 1.1620 dollars. Against the yen, the dollar was trading slightly lower at 148.38 yen compared to 148.45 yen. The yield on the US 10-year Treasury was at 4.35%, trimmed from 4.42%. The yield on the US 30-year Treasury was at 4.88% narrowed from 4.96%. On Wall Street, Merck was another drugs maker in the news with shares down 4.8% as it announced plans to save 3 billion dollars annually by the end of 2027, and tightened full-year guidance, as second quarter sales fell short of expectations. The Rahway, New Jersey-based pharmaceutical company said GAAP net income fell 19% to 4.43 billion dollars in the second quarter of 2025 from 5.46 billion dollars a year prior. Sales decreased 1.9% to 15.81 billion dollars from 16.11 billion dollars a year ago, missing LSEG consensus of 15.89 billion dollars. Sales of human papillomavirus drug, Gardasil, slumped 55% to 1.13 billion dollars due to lower demand in China. Brent oil was quoted higher at 70.74 dollars a barrel in London on Tuesday, up from 69.65 dollars late on Monday. Gold rose to 3,327.45 dollars an ounce against 3,314.26 dollars. The biggest risers on the FTSE 100 were Games Workshop, up 830p at 16,090p; AstraZeneca, up 368p at 11,158p; Endeavour Mining, up 66p at 2,332p; Barclays, up 10p at 371.2p; and Rolls-Royce, up 24.6p at 1,006p. The biggest fallers on the FTSE 100 were Croda International, down 301p at 2,598p; Rentokil Initial, down 12.9p at 348.1p; Glencore, down 10.8p at 305.9p; Unite Group, down 21.5p at 764.5p; and Whitbread, down 86p at 3,108p. Wednesday's local corporate calendar has half-year results from defence manufacturer BAE Systems, Asia-focused lender HSBC, pharmaceuticals firm GSK, miners Rio Tinto and Glencore and housebuilder Taylor Wimpey. The global economic calendar on Wednesday sees interest rate decisions in the US and Canada, and US economic growth figures.
Kuwait Times
3 days ago
- Automotive
- Kuwait Times
Volkswagen takes 1.3-billion-euro hit from Trump tariffs
WOLFSBURG: A general view shows the Wolfsburg Volkswagen plant, the worldwide headquarters of the Volkswagen Group, in Wolfsburg, Germany. - AFP FRANKFURT: German auto giant Volkswagen said Friday that tariffs imposed by US President Donald Trump had cost it 1.3 billion euros in the first half of the year as it reported falling profit. Overall net profit fell 38.5 percent year-on-year during the period to hit 4.48 billion euros ($5.26 billion). Higher sales of lower-margin electric vehicles (EVs) as well as restructuring costs hit the result in addition to the tariffs, Volkswagen said. Finance chief Arno Antlitz said Volkswagen was nevertheless 'on the right track' and that performance was at the 'upper end of expectations', if tariffs and restructuring costs are excluded. But he warned on an earnings call that 'tariffs are likely to remain a permanent burden' and said Volkswagen would have to redouble cost-cutting efforts 'to offset' the effect. The crisis-hit company struck an unprecedented deal with unions last December to cut 35,000 jobs in Germany by 2030 as part of plans to save 15 billion euros a year. The 10-brand group cut its revenue and profit outlook, warning of 'political uncertainty and increased barriers to trade' for the remainder of the year. It now forecasts a profit margin for the year of between 4 and 5 percent, down from 5.5 to 6.5 percent previously, amounting to billions of euros for the firm. The range assumes that the United States will levy tariffs of 10 percent on imported cars in the best case and stick to its current rate of 27.5 percent in the worst, Volkswagen said. Volkswagen's previous guidance, released in April shortly after new US tariffs took effect, did not take the increased duties into account. Sales by volume in North America fell 16 percent 'mainly due to tariffs' in the first half even as they rose slightly worldwide, Volkswagen said. Trump in April slapped an additional 25-percent levy on imported cars as part of an aggressive trade policy he says will help boost US manufacturing. That has hit European carmakers. Stellantis—whose brands include Jeep, Citroen and Fiat—said on Monday that North American vehicle sales by volume plunged 25 percent in the second quarter of the year. Tariff talks US and European Union diplomats are currently negotiating ahead of the latest deadline set by Trump, who has threatened a blanket duty of 30 percent after August 1 if no agreement is reached. CEO Oliver Blume said on the earnings call that he had a clear 'plea' to negotiators. 'We are counting on the EU Commission and the US government to reach a balanced outcome on the tariff issue,' he said. 'This is the basis for a competitive economy on both sides of the Atlantic.' The carmaker's shares initially slipped but later rose to stand up more than three percent in morning trading, while the Frankfurt Stock Exchange's main DAX 40 index was down 0.6 percent. Metzler bank analyst Pal Skirta said the rise likely reflected Blume telling investors on the earnings call that he saw 'positive momentum from 2026 onwards' for Audi and Porsche, two premium brands that have for years struggled with declining sales in China. — AFP
Local Germany
4 days ago
- Automotive
- Local Germany
Volkswagen takes massive hit from Trump tariffs as profits fall
Overall net profit fell 38.5 percent year-on-year during the period to hit 4.48 billion euros. Higher sales of lower-margin electric vehicles (EVs) as well as restructuring costs hit the result in addition to the tariffs, Volkswagen said. Finance chief Arno Antlitz said Volkswagen was nevertheless "on the right track" and that performance was at the "upper end of expectations", if tariffs and restructuring costs are excluded. But he warned on an earnings call that "tariffs are likely to remain a permanent burden" and said Volkswagen would have to redouble cost-cutting efforts "to offset" the effect. The crisis-hit company struck an unprecedented deal with unions last December to cut 35,000 jobs in Germany by 2030 as part of plans to save 15 billion euros a year. Outlook cut The 10-brand group cut its revenue and profit outlook, warning of "political uncertainty and increased barriers to trade" for the remainder of the year. It now forecasts a profit margin for the year of between 4 and 5 percent, down from 5.5 to 6.5 percent previously, amounting to billions of euros for the firm. The range assumes that the United States will levy tariffs of 10 percent on imported cars in the best case and stick to its current rate of 27.5 percent in the worst, Volkswagen said. Volkswagen's previous guidance, released in April shortly after new US tariffs took effect, did not take the increased duties into account. Sales by volume in North America fell 16 percent "mainly due to tariffs" in the first half even as they rose slightly worldwide, Volkswagen said. READ ALSO: Impact of US tariffs varies across European Union Trump in April slapped an additional 25-percent levy on imported cars as part of an aggressive trade policy he says will help boost US manufacturing. That has hit European carmakers. Stellantis -- whose brands include Jeep, Citroen and Fiat -- said on Monday that North American vehicle sales by volume plunged 25 percent in the second quarter of the year. Tariff talks US and European Union diplomats are currently negotiating ahead of the latest deadline set by Trump, who has threatened a blanket duty of 30 percent after August 1st if no agreement is reached. Advertisement CEO Oliver Blume said on the earnings call that he had a clear "plea" to negotiators. "We are counting on the EU Commission and the US government to reach a balanced outcome on the tariff issue," he said. "This is the basis for a competitive economy on both sides of the Atlantic." The carmaker's shares initially slipped but later rose to stand up more than three percent in morning trading, while the Frankfurt Stock Exchange's main DAX 40 index was down 0.6 percent. Metzler bank analyst Pal Skirta said the rise likely reflected Blume telling investors on the earnings call that he saw "positive momentum from 2026 onwards" for Audi and Porsche, two premium brands that have for years struggled with declining sales in China.
Mid East Info
07-07-2025
- Business
- Mid East Info
Trade Deadlines, Market Sentiment, and U.S. Resilience: what to watch this week
By Daniela Sabin Hathorn, senior market analyst at As markets edge closer to a pivotal trade deadline, investors are weighing rumours, partial deals, and the potential for last-minute extensions. Amid these developments, optimism in U.S. equity markets remains strong—but so do the risks. Trade Talks: Progress or Posturing? The latest chatter suggests that the U.S. government may offer an extension to key trading partners in an effort to finalize agreements that, so far, have been more framework than formal deal. While just three trade deals have been publicly acknowledged, none have fully materialized. The lull in trade updates over the past six weeks may have stemmed from geopolitical distractions that shifted market focus elsewhere. However, with the deadline just two days away, attention is turning sharply back to trade negotiations. President Trump has indicated that letters to partners are being sent and that a slew of announcements could arrive shortly. Despite these signs, the situation remains fluid. Markets are pricing in optimism on the basis of three possibilities: A last-minute flurry of finalized deals. A formal extension period to allow continued negotiation. A hybrid outcome—some deals now, some extensions for others. Reports suggest Japan, South Korea, and parts of Europe are current sticking points. Market Sentiment: Sentiment in equity markets is currently buoyant. Investors are inclined to buy into news of successful deals or even a pause in hostilities, as this reduces market volatility. However, a surprise—similar to the sharp tariff hike on Liberation Day—could catch investors off guard. Back then, markets were expecting modest tariffs, but reality far exceeded expectations, leading to a sharp reaction. Treasury official Scott Bessing has added some clarity, saying that absent finalized deals, letters would be sent to notify trading partners of a reversion to April 2 tariff levels. This conditional approach adds another layer of complexity. Market reaction will hinge on which countries receive deals, and which face tariff reimpositions. Key trading partners like China, the EU, Canada, Japan, and Korea will be especially watched. Positive sentiment is likely to hold if these major players reach agreements—even if deals with smaller economies stall. Equities Performance: U.S. Leads, Europe and Asia Lag The U.S. equity markets continue to outshine their global counterparts. The S&P 500 and Nasdaq 100 have reached new highs. In contrast, European indices like the DAX 40 and FTSE 100, as well as Japan's Nikkei, have struggled. US 100 daily chart: Past performance is not a reliable indicator of future results. This divergence reflects a broader return to U.S. market dominance, fuelled not just by geopolitics but by growth and earnings expectations. Reports indicate EU-U.S. negotiations have faltered, with no breakthrough over the weekend. An extension may be more realistic than a completed deal by the July 9 deadline. While trade dominates headlines, it's not the sole factor pushing U.S. markets higher. AI and tech sectors have had a significant impact as they have driven strong earnings growth, especially heading into earnings season. Despite trade uncertainties, stellar Q2 results from major tech firms have boosted investor confidence. Earnings per share from leading tech companies outpaced forecasts significantly. This resilience offsets some of the economic risks that would typically weigh on equities in a high-interest-rate environment. A key question is: How can equities thrive when interest rates remain high? This paradox hinges on the growth narrative. High rates generally reduce the present value of future cash flows, hurting valuations. However, when growth is strong, corporate earnings increase and offset this rate pressure. Strong labour market data—such as last week's jobs report—underscores this resilience in the U.S. economy. It's also important to note that bullishness in equities doesn't necessarily translate to bullishness in bonds. One can be optimistic about stocks while still bearish on long-term treasuries, expecting yields to rise further. The 'Big, Beautiful Bill' and Long-Term Risks: Recently passed legislation—dubbed the 'big, beautiful bill'—is expected to boost short-term growth. However, it also adds to the national debt, which could become a concern in the medium term. For now, markets are unfazed, viewing the bill as a pro-growth measure. But in the next six months, watch for sentiment shifts if debt servicing and structural deficits become more pressing. As the July 9 deadline looms, markets are hoping for extensions, partial agreements, or at least no nasty surprises. If deals with key partners come through—even at lower-than-expected tariff levels—positive sentiment is likely to persist. At the same time, investors would do well to keep an eye on the broader narrative. Resilient growth, tech-driven earnings, and U.S. market leadership are all crucial components of the current rally. But risks—from trade shocks to rising debt—still lurk. Stay tuned. The next 48 hours may be decisive.
Business Times
27-06-2025
- Business
- Business Times
Betting on local assets could pay off for Singapore investors: Deutsche Bank Private Bank CIO
[SINGAPORE] Investors in Singapore may want to allocate more funds to local assets, which appear resilient amid global economic uncertainty, said Deutsche Bank Private Bank global chief investment officer Christian Nolting on Friday (Jun 27). 'I think economically, (Singapore) is very nicely positioned', he said at a media briefing on the private bank's outlook for major economies and the various asset classes, as well as its recommended strategies for investors. Deutsche Bank's Singapore clients tend to hold 'very well diversified' portfolios with assets spread across global markets, but have limited investments locally, he noted. Although diversification is generally a positive strategy, investors in Singapore could consider increasing their allocation to domestic assets, he added. Singapore is less affected by US tariffs than other countries, facing only the baseline 10 per cent rate. This is 'very important' for a highly export-oriented economy, he said. He noted promising prospects for Singapore's real estate and stock markets. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Jason Liu, head of the CIO Office at Deutsche Bank Private Bank, described Singapore bank equities as 'very safe' assets in the current climate of global uncertainty, in that they offer a 'very good' dividend yield of over 5 percent. 'We have seen a lot of (capital) inflows since the beginning of the year,' he added. US dollar softens, equities may hold up Since the start of the year, there has been a considerable outflow of capital from the US – but this does not necessarily mean US assets will lose attractiveness, said Nolting. Given the euro's strengthening against the dollar, and turbulence in the yield of European treasuries, it is clear that there has been a flow of capital from the US into Europe, he said. A 'small amount of capital' is also moving to Asia, said Liu, noting the year-to-date appreciation of the Singapore dollar, Taiwan dollar and the Japanese yen relative to the US dollar. Nolting expects the capital outflow to continue, so the greenback could weaken a bit further over the next 12 months – but not collapse. 'I don't think there's a currency – at this point in time – which would replace the dollar,' he said. Furthermore, the expected weakness of the US dollar does not mean that other US assets will become less attractive, he added. The US continues to achieve stronger productivity growth than Europe, supporting its long-term investment appeal. The sheer size of the US market also allows it to absorb outflows while still delivering solid performance, he said. 'Even with some money flowing out, you can still have a nice performance, because it's so much larger.' To illustrate the disparity, Nolting noted that the total market capitalisation of Germany's DAX 40 blue-chip index is smaller than that of a single US tech giant such as Apple.
