U.K. equities surged Thursday, lifted by renewed global market optimism after President Donald Trump announced a 90-day suspension of tariff hikes for most U.S. trade allies. The announcement boosted investor sentiment, propelling the FTSE 100 index up 5.4% as of 08:15 GMT—its strongest single-day gain in months. The FTSE 250 index also climbed 1.95%.
The tariff reprieve, which excludes China, was interpreted by markets as a de-escalation in trade tensions, even as the U.S. raised tariffs on Chinese goods to 125%. China’s earlier move to hike tariffs on American imports to 84% remains in place.
Meanwhile, the European Union greenlit its first round of retaliatory tariffs in response to U.S. levies on steel and aluminum—an added layer of complexity to the global trade environment.
Tesco Sees Pressure on Future Profits
Despite broader market gains, Tesco PLC (LON:TSCO) shares fell 5.7% after issuing a cautionary forecast for the upcoming fiscal year. The retail giant warned that rising operational costs, persistent inflation, and increased competition could reduce adjusted operating profit to between £2.7 billion and £3 billion, down from £3.13 billion in the fiscal year ending February 22, 2025.
Other corporate developments also weighed on sentiment:
- TT Electronics dropped 14.4% after maintaining FY24 guidance but slashing its FY25 forecast.
- CEO Peter France resigned immediately; CFO Larkin stepped in as interim CEO.
Tesco’s announcement underscores ongoing challenges in the U.K. retail sector, where food price inflation and margin pressures continue to erode profitability despite stable revenue.
UK Housing Market Slows in March
New data from the Royal Institution of Chartered Surveyors (RICS) shows the U.K. housing market weakening further in March. The latest survey highlighted declining buyer interest, a slowdown in property sales, and limited pricing momentum.
- Net buyer enquiries plunged to -32%, compared to -16% in February.
- This marks the weakest demand since September 2023.
These figures signal caution among prospective buyers, driven by high mortgage rates and affordability concerns. While expectations for interest rate cuts later this year remain, housing demand continues to falter in the short term.
Elsewhere, LondonMetric Property (LON:LMPL) announced the acquisition of a long-lease M&S logistics warehouse for £74 million, reflecting a net initial yield (NIY) of 5.65%, signaling continued appetite for income-producing logistics assets.
