- FTSE 100 falls 59 points to 8,697
- Melrose falls despite strong results
- Schroders, Admiral, ITV impress with their annual numbers
- ECB cuts interest rates, markets see fewer cuts this year
4.05pm: Mixed markets as another tariff reprieve expected
London's blue chip benchmark is looking like finishing firmly in the red, down 0.7% as we head into the final half hour, though roughly half the shares in the index are not in the red.
European stocks have turned green, however, with the CAC, IBEX and FTSE MIB in positive territory to join the DAX after it hit a fresh all-time high earlier.
This follows Howard Lutnick, the US Secretary of Commerce, saying that the tariff reprieve announced for US cars is now likely to include all products.
"The news caused the Canadian dollar and Mexican peso to rally sharply," says market analyst Fawad Razaqzada at City Index, which spread to a wider relief rebound in European stocks, the euro.
US stocks remain underwater, though losses have been pared.
"The question now is whether dip-buyers will make a return, as they have in recent sessions," says Razaqzada.
"The Nasdaq and S&P 500 are both at pivotal junctures, testing their respective 200-day moving averages alongside key tech names such as Amazon, Oracle, Tesla, and MicroStrategy."
3.46pm: Blue-chip movers
The FTSE 100 is slowly paring losses, helped to a degree by Schroders PLC (LSE:SDR), which is way out in front at the top of the leaderboard, up 10% now.
The fund manager and wealth group provided a strategy update alongside reporting profits ahead of estimates as flows into its funds in the fourth quarter stronger than expected.
Analyst Rae Maile at Panmure Liberum said: "Schroders did not need transformation, it needed focus and a recommitment to growth in core areas and that seems to be the plan. Active management is put back at the centre."
Looking at what this means in terms of consensus estimates, Maile believes that 2025 will see little change but 2026 and 2027 could see big increases.
Behind Schroders, is Admiral Group PLC, up 4% after its results earlier.
Gold miner Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF) is up almost 3% after announcing a record-breaking fourth quarter, generating $268 million in free cash flow.
Broker Stifel had some positive words, citing the company’s sector-leading production margins, shareholder returns and organic growth.
WPP Group PLC is bouncing back from recent selling, while Primark owner Associated British Foods PLC is up, possibly on the back of Pepco's announced exit from Germany, analysts suggest.
Among the fallers, Melrose has been hard hit despite announcing strong results. The shares are down 17% now., wiping out gains from the past six weeks.
Analysts said the lack of an increase to the outlook was probably the cause, triggering many investors to take profits.
Rentokil Initial is down 9.5% as it gave investors little to cheer about with largely expected news that profit tumbled last year on challenges within its North American.
Clarity on its so-far difficult integration with Terminix was a positive, analysts noted.
3.12pm: Poundland up for sale
Poundland owner Pepco Group has said buyers are interested in the struggling budget retail chain’s 825 UK stores.
At a capital markets day earlier, chief executive Stephan Borchert signalled options to split Poundland from the business were being assessed.
“There are definitely interested parties for this business,” he told Reuters, without adding details on pricing or the stage of talks.
Poundland generated over €2 billion in revenue last year but was operating in an "increasingly challenging" UK retail sector, Pepco said, adding that this is "only intensifying" with Budget-related incoming.
Analysts suggested that it was difficult to think who would be interesting in buying Poundland and a separate listing might have been an option if it were not for the current IPO climate.
2.52pm: Its another Wall Street sell-off morning
US stocks are having another frenzied morning of selling.
The S&P 500 has tumbled 1.5% at the open, with the Nasdaq Composite down 1.8% and the Dow Jones losing 1.3%, while the SMID caps of the Russell 2000 are down 0.3%.
Nvidia is down 3.8%, with other semiconductor stocks also falling. Super Micro Computer is sown 7.7% and Broadcom is down 6.7%.
Some traders are citing earnings from custom chip maker Marvell Technologies as the cause, with Bloomberg Intelligence analysts saying the numbers "might disappoint when compared with typical expectations for sizable beat and raises from AI semiconductor companies".
1.45pm: ECB analysed
Some reactions to the ECB rate cut are coming through.
Quick off the mark, with the decision as expected, is George Martin, a fixed income analyst at Charles Stanley, who says: "Inflation concerns persist across European economies and concerns over weaker growth, especially in light of Trump’s tariffs, have led some officials to emphasise the desire for less restrictive policy.
"Although today's ECB cut was very much expected, it comes after recent data highlighted an uptick in European inflation and material developments from Germany, who casted off years of fiscal restraint with new spending rules amidst a 'whatever it takes' approach to defence."
With the European Union also pledging to issue more loans to boost spending, these factors had already materially lowered the market's ECB rate expectations, with more than three rate cuts in 2025, to less than three heading into today's meeting.
Jack Allen-Reynolds at Capital Economics says the decision "came alongside new language which shows that policymakers are becoming less certain about the future path of interest rates. Looser fiscal policy and the risk of tariffs add to the uncertainty."
As the cut was fully discounted in the market, there is more interest in how the ECB adjusts its messaging.
He notes the press release has changed from describing policy as "restrictive" to "is becoming meaningfully less restrictive", which Allen-Reynolds says implies that the governing council’s collective judgement is still that policy is tight.
With the bank adding that its data-dependent approach to policy decisions is especially important "in current conditions of rising uncertainty", he says this shows policymakers are "clearly becoming more cautious about further rate cuts".
The press conference starts now (13:45 GMT), with Christine Lagarde to be quizzed on Germany’s commitment to looser fiscal policy but Allen-Reynolds reckons she will "say little about its implication for monetary policy, instead highlighting the uncertainty. But she may acknowledge that we’re moving into a period when policy decisions will become more difficult."
He thinks the ECB deposit rate will decline to 2% rather than the 1.5% level that he had previously assumed.
1.26pm: ECB cuts rates
The European Central Bank has cut its deposit interest rate by a quarter of a percentage point, as expected, to rate from 2.75% to 2.50%. This is the sixth cut since last June.
"We are doing this because inflation is on track to settle at around our 2% target, and the economy is facing headwinds," the central bank said.
"The disinflation process is well on track. Inflation has continued to develop broadly as staff expected, and the latest projections closely align with the previous inflation outlook," it added.
Inflation expectations and growth forecasts were also released.
For 2025 inflation is predicted to be 2.3%, up from the prior 2.1% estimate. For 2026 core inflation (excluding food and energy) is seen at 2.0% up from 1.9% last time out.
For 2025 GDP growth is seen at 0.9%, down from the prior forecast of 1.1%. For 2026 GDP is predicted to grow 1.2%, down from 1.4% before.
A press conference with ECB president Christine Lagarde is coming up.
ECB cheat sheet via @ING_Economics pic.twitter.com/lbfEfsdFkF
— Michael Brown (@MrMBrown) March 3, 2025
1pm: US economy in focus
The North American economy is under the microscope amid the start of tariffs this week.
S&P Global Ratings has cut its forecasts, with US real GDP predicted to fall by 0.6% this year, with the tariffs causing about half that.
Canada's GDP is expected to decline 2.5% and Mexico 0.5% if tariffs are in place for the whole year. Both worse than previous forecasts four months ago.
Paul Gruenwald, chief global economist at S&P, says: "There are no winners in a trade war. The US-instigated tariffs and trading partner counter-tariffs will lead to across-the-board lower GDP growth, higher unemployment rates, and higher inflation."
He said weakening economic conditions are likely to lead to the Bank of Canada cutting interest rates more, while Mexican officials will "continue to be pragmatic" in their negotiations with US officials, to lessen the duration of tariffs.
Separately, Capital Economics now forecasts that US first-quarter GDP will be down 1.9% year-on-year, but believe that the US economy "will escape recession and rebound in the second quarter, as the distortion caused by the unseasonably severe winter weather and the pre-tariff- surge in imports are both reversed".
12.39pm: Wall Street down day expected
US stocks are set for a tough start on Thursday.
Two hours before the opening bell, S&P 500 futures are down 1.1%, with Nasdaq 100 futures trading down 1.4% and Dow Jones futures 0.9% lower.
In pre-market trading, Nvidia is down 2.6%, while Palantir and Tesla are both around 2% lower.
After yesterday's US ADP jobs report and before tomorrow's big non-farm payrolls report, today's US data includes the Challenger job cuts and initial jobless claims.
Market analyst Kenny Polcari at Slatestone Wealth says while these figures "don’t usually create havoc", if the numbers veer substantially away from expectations, he expects "algo’s to overreact" - ie algorithmic trading systems.
The all-important number is tomorrow's official jobs report, and "you can feel the tension", he says.
"Maybe the correction is upon us and that would not be a bad thing….prices got stretched, and if we are intentionally trying to slow the economy then prices will and should reset."
He notes that US Treasury yields are higher, with the 10yr up 2bps to 4.3%, the 2yr is now yielding 4%. "Both remain well below the most recent highs of 4.6% and 4.3% respectively – but are up from their most recent lows of 4.13% and 3.85%".
After oil collapsed again yesterday, with WTI falling 2.7% to end the day at $66.39 and testing $65.2, Polcari notes that Trump campaigned on (to use the President's beloved capital letters) LOWER OIL PRICES so "none of this should be a surprise to anyone – not only did he tell us to expect lower prices, the charts also suggested lower oil prices… and lower oil prices are good for the economy, good for inflation, good for demand and good for us to refill the empty Strategic Petroleum Reserve that the Biden’s depleted…so that’s just another reason NOT to light our hair on fire."
12.02pm: Lloyds least prefered
Lloyds Banking Group PLC is much liked by retail investors, but Citi has ranked the share as the least preferred in its UK banking coverage, assigning the lender a 'neutral' rating and expressing concerns over its ability to deliver upside surprises.
While UK banks have seen strong year-to-date gains, with shares rising between 9% and 30%, Lloyds has been one of the top performers alongside Standard Chartered.
However, Citi flagged that while Barclays, HSBC and NatWest have set return-on-equity targets based on conservative assumptions, Lloyds and Standard Chartered appear to have less flexibility to outperform expectations.
Citi’s preferred order of UK banks is NatWest, HSBC, Barclays, Standard Chartered, and finally Lloyds at the bottom of the list.
11.53am: Barclays payout
Barclays PLC (LSE:BARC) is reportedly gearing up to pay out millions in compensation to customers over recent online banking outages.
Some £5 million to £7.5 million was expected to be paid for “inconvenience or distress” caused by the issue earlier this year, according to a letter to MPs seen by Sky News.
Several days of disruption from the end of January coincided with many customers’ paydays and the self-assessment tax returns deadline.
Barclays noted 56% of its online payments failed as a result of the glitch in the letter, which was sent to the Treasury Committee.
11.20am: Bond markets have overeacted?
Bond markets may have overreacted, says UBS chief investment officer Mark Haefele, as he
"The rise in bond yields presents an opportunity, given German’s solid fiscal position," he said in a note received this morning.
"The 10-year bund yields rose from 2.4% last Friday to 2.80% by the time of writing. We believe bond markets have overreacted with respect to the credit risk, and maybe even overstated the technical implications in the form of higher future bond supply."
He acknowledges that the precise rollout schedule of Germany's extra spending efforts is still unclear, but he believes it's "unlikely" to challenge Germany's AAA credit rating.
"Even if Germany were to increase spending to level levels assumed above over the next 10 years, and assuming a moderate growth multiplier, our simulations indicate that the debt-to-GDP ratio would still land in the mid 60% area by 2030 (assuming no other shocks to growth and debt).
"We believe the German plans have the potential to improve the investment outlook for the nation and the region.
"Yet uncertainties remain high, particularly concerning potential tariff risks," which he says necessitates a selective approach to gaining exposure to the DAX, also seeing the EU industrial sector, EU small-caps and mid-caps as attractive, with the rise in yields "an opportunity to lock in attractive yields in medium tenor quality corporate bonds".
The significant shift in Europe's fiscal stance potentially "benefits the euro and reduces downside risks, in our view", though in the near term he sees risks of a pullback in EURUSD, "as escalating tariff threats from the US could weigh on sentiment and limit further upside".
This is echoed in comments from Citi, which reckons that in the coming months "the negative shock of tariffs should outweigh the optimism around future EU spending", expecting a lower EURUSD in the coming months "before rebounding in H2".
Goldman Sachs has also upped its growth forecasts for Germany due to the likely increased fiscal spending on defence and infrastructure boosts, predicting a modest growth spillover to the broader euro area, with US tariffs potentially taking the edge off.
There is now Less pressure on the ECB to cut rates, Goldman reckons, seeing a July cut as now unlikely.
11.04am: More sellers than buyers
The FTSE 100 is now down over 100 points or -1.2%, while the FTSE 250 is down 0.25%.
Top riser for the London blue-chips is Schroders, up over 6%.
Across the Channel, only the DAX is on dry land, with the other major benchmarks all under water now.
The German index's gains have been cut; it's up 0.2% now, while the CAC 40 is down 0.6% in Paris, the IBEX 35 is 0.7% lower in Madrid and the FTSE MIB in Milan has also just dropped into the red too.
The Euro Stoxx 600 is down 0.66%, with fallers led by Swiss tech components maker Comet, UK aerospace group Melrose, French lottery operator FDJ, Swiss pharma group Valderma.
In Germany, fallers are led by bond-sensitive names in real estate, telecoms, with some profit taking of aerospace and defence shares after big gains in recent days.
10.31am: FTSE 250 gives up gains
In contrast to its larger sibling, the FTSE 250 was moving higher in early trading but is now in the red.
A fall for Spire Healthcare Group Plc (LSE:SPI) shares of 17% is one of the big reasons, after the company posted a slight earnings miss and issued a cautious outlook for 2025.
EBITDA increased 9% last year but cost pressures are mounting, with higher wage bills, energy costs, and changes in patient mix expected to weigh on margins this year. Spire revealed a £40 million EBITDA hit from higher employer National Insurance costs starting in April.
The company is targeting £30 million in new cost savings for 2025, up £10 million from initial plans.
Analysts at both Panmure Liberum and Peel Hunt described the miss against consensus as modest - so the knee-jerk markdown of the stock in early deals was a bit of a head-scratcher.
Harbour Energy and Ithaca Energy are both down, 12% and 6%, respectively. Harbour had results out earlier.
9.57am: Euro up as German bond cause worries
German borrowing costs seem to be worrying people, but the DAX is still up, thanks to gains for the likes of Siemens Energy, Mercedez Benz, BMW and Heidelberg Materials.
The yield on a German 10-year bund is up above 2.86%, the highest in over a year, not far off multi-year peaks reached in 2023.
This is up from below 2.4% at the end of last week and on the back of Germany's plans to unleash a monumental amount of cash for arms.
Yesterday's rise of 30 basis points in a day was its biggest jump since 1997, notes market analyst Neil Wilson of TipRanks, and with another leg up this morning.
As a result, the euro is above $1.08 at its highest since November.
"Global bond yields are rising as a result of the move started in Europe with the Japanese government 10yr at a 16yr high and the 10yr gilt also ticking up above 4.7%, near levels last seen during the global financial crisis.
"Meanwhile, the whole Trump chaos is hitting the dollar across the board," he says, with the GBP also at $1.29 this morning and the dollar index down 1.5% to 104.14 also the lowest since early November.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, notes that investors "are trying to digest a major sell-off in European bonds", led by Germany, where there are expectations of a loosening of the country’s strict borrowing rules.
"UK Gilts followed suit, and yields have ticked higher again in early trading this morning, with rate cut expectations coming under fresh scrutiny."
9.19am: European markets mixed
The FTSE 100 is down 0.7% now, and in the week so far is now 1.6% lower despite racking up an all-time high on Monday, while European markets are mixed.
Germany's DAX is up 0.7% but France's CAC and Spain's IBEX have both stumbled from the green into the red in the past few minutes.
I'm not sure what's changed to make that happen.
Market analyst Neil Wilson at TipRanks says geopolitics never changes: "the players are different every four years but the teams are the same, the 22 and touchlines are always in the same place. Russian paranoia about its territorial integrity fuelling incursions, American isolationism, Britain’s willingness to send troops absolutely anywhere...nothing especially changes."
But he says the "scale and pace of change cannot be overstated" in the past weeks, where €200 billion of additional spending has now mushroomed closer to €1 trillion.
"Obviously, the challenge is in how the ECB deals with all of this... Given the changes of the last fortnight the outlook has clearly changed but the ECB won’t react too soon to this.
"Tariffs were expected to trigger deeper rate cuts by the ECB but I bet even they didn’t bank on the scale of the fiscal expansion. The risk is of course that yields push up along with inflation such as to force the ECB to go restrictive again.
"Since December, the ECB has been saying it no longer aims for sufficiently restrictive policy, so the debate is about what constitutes neutral. Chuck in tariffs and a massive loosening on the fiscal side and the debate will get a lot more complicated."
8.51am: Rentokil's American integration in focus
Shares in Rentokil Initial PLC (LSE:RTO) are down 3.4% after it confirmed a drop in profit after a challenging year for its North American business.
Pre-tax profit dropped 18% to £405 million as revenue climbed 1.1% to £5.4 billion, the pest-control business said on Thursday.
International revenue growth of 4.7% had been “held back” by a shallower 1.5% uptick in North America, where issues completing a merger with Terminix have been the main problem. An integration strategy review has now been completed, with a pause scheduled to be lifted in the second half of the year and be complete by end-2026.
"The Terminix integration is making good progress," says chief executive Andy Ransom.
Analyst Sam Dindol at Stifel says the headline numbers are as expected. "Overall, we view clarity on the integration strategy as positive, and note the strategic gap to peer Rollins has narrowed."
Clearly, the focus this year "will be on execution" given the challenges of last year.
8.36am: Admiral admired despite tough outlook
Admiral Group Plc (LSE:ADM) is top pf the FTSE 100 leaderboard after the insurer reported profits ahead of forecasts, even though it said "the market is softening and the outlook is uncertain".
Pre-tax profit raced up 90% to £839 million, including a strong contribution from the UK motor business, while the international business lowered its loss to £5 million.
Despite the softer market, management still hopes to grow.
Analyst Andreas Van Embden at Peel Hunt said Admiral "has a healthy reserve position that can support profits via strong reserve releases".
"Overall, the 2024 results are better than we had pencilled in, for what we already assumed was going to be a strong underwriting year; however, the outlook for the next few years will be more challenging in our view."
8.14am: FTSE sinks into the red
The FTSE 100 opened higher initially but has quickly sunk into the red, down 20 points to 8,735.5.
Melrose Industries PLC, which reported results today that looked ahead of expectations, is down 5%.
HSBC Holdings PLC is down 3.4% as its shares go ex-dividend today, along with Rio Tinto, Berkely Group and LondonMetric Property.
Rentokil Initial PLC and Reckitt Benckiser Group PLC, both on the back of results, are down 3.1% and 2.2% respectively.
7.56am: ECB meeting to see cut today - but will anyone care?
Markets have welcomed Donald Trump's reprieve for the North American car industry, says market analyst Ipek Ozkardeskaya at Swissquote Bank, which she says may be the factor that drives markets today rather than the European Central Bank meeting later.
This roll back is "arguably a better outcome than imposing and sticking to 25% tariffs" but "the uncertainty and lack of seriousness in these decisions will undoubtedly have a sizeable impact on US growth", she adds.
Car stocks rebounded yesterday on the delayed tariffs.
Ozkardeskaya says the market is moving to a different beat this year, rather than being solely driven by AI and central bank decisions as in the past two years.
In short, she says US growth expectations remain closely linked to inflation and Fed policy, while European growth forecasts are getting a lift from higher spending prospects and becoming less dependent on the ECB monetary decisions.
Weakening US growth expectations and strengthening European growth prospects continue to favour European assets.
This is why the 30bps jump in German 10-year bond yields and the higher-than-expected PPI inflation data in the eurozone didn’t prevent the German DAX index from gaining more than 3% yesterday, she says.
The Stoxx 600 index is set for its biggest quarterly outperformance against the S&P 500 in a decade and the EURUSD recorded its best three-day session in a decade.
At today's ECB meeting, there is widely expected to be a rate cut of 25 basis points.
"The press conference will be particularly interesting as it marks Lagarde’s first remarks since the US decided to withdraw military support for Europe."
7.48am: Reckitt profits down but hikes dividend
Reckitt Benckiser Group PLC has upped its dividend despite a drop in profit last year on efforts to revamp the consumer goods business.
It is focusing more on its core Hygiene, Health and Nutrition divisions and said plans to exit the 'Essential Home' space were on track for the end of this year.
Operating profit fell 4.2% to £2.43 billion last year as revenue slipped 3% to £14.17 billion.
A full-year dividend of 202.1p per share was declared, marking a 5% increase, despite the drop, which Reckitt attributed to higher impairment and restructuring costs.
7.31am: ITV revenues down but profits up
ITV has reported strong profit growth despite lower revenues last year as it generated more savings than expected from its efficiency programme.
Group revenue shrank 3% to £4.1 billion in 2024, with total advertising revenue up 2% but offset by a 6% decline at the ITV Studios production arm due to the Hollywood strikes and a softer demand from free-to-air broadcasters.
But ITV Studios made record profits thanks in part to successes in the year that included 'Mr Bates', the biggest UK drama of the year, hits for streamers such as 'Fool Me Once' for Netflix and 'Rivals' proving a hit for Disney+, while 'Love Island USA' was the number one reality series in the US.
CEO Carolyn McCall says: "Our efficiency programme has delivered savings which have funded growth investments, offset inflation and improved our margins."
She says ITV is "becoming a more resilient business" with content production and digital now accounting for close to two thirds of revenue and the ongoing transformation "ensures we are an adaptable and agile company, well positioned to deliver good profitable growth, strong cash generation and attractive returns to shareholders".
7.16am: FTSE 100 to have spring in its step
The FTSE 100 is expected to start Thursday with a spring in its step, ahead of another busy day of results and following an upbeat session on Wall Street overnight.
London's blue-chip benchmark has been called 51 points higher on futures markets, similar to the day before, which ended with the index slowly sliding into the red, finishing just over three points lower at 8,755.8 as utilities and other defensive stocks were sold.
There were more buyers than sellers of US stocks last night though, with the S&P 500 and Dow Jones surging 1.1% higher and the Nasdaq up 1.5%.
Carmakers were among the winners, as they gained a reprieve from the Canada and Mexico tariffs, though they will only be delayed by a month.
Asian markets are swathed in green this morning, led by the Hang Seng again, which is rocketing over 3% higher.
The Chinese government announced a moderate stimulus overnight, setting a GDP growth target of "around 5%" again for 2025, which economists said was expected.
5am: What to watch on Thursday
Takeover speculation has swirled around ITV recently... Read more
Investors will want to hear how Reckitt's transformation plan is playing out... Read more
Melrose bagged positive commentary from analysts prior to its update... Read more
Announcements due on 6 March:
Finals: Admiral Group, Coats Group PLC, Dalata Hotel Group PLC, Elementis PLC, Endeavour Mining PLC, Entain PLC, Funding Circle PLC, Grafton Group, Greencoat Renewables PLC, Harbour Energy PLC, Hunting PLC, ITV PLC, Lancashire Holdings, Melrose Industries PLC, PageGroup PLC, Reckitt Benckiser Group PLC, Rentokil Initial PLC, Schroder Oriental Income Fund, Schroders PLC, Spire Healthcare Group PLC, Vesuvius PLC
US earnings: JD.com, Broadcom, Costco Wholesale, Hewlett Packard
AGMs: APQ Global Ltd, Aberforth Smaller Companies Trust PLC, Assetco PLC, Blackrock Income And Growth Investment Trust PLC, Tertiary Minerals PLC
Economic announcements: Construction PMI (UK), Retail Sales (EU)
Ex-dividends to reduce FTSE 100 by: 28.87