- FTSE down 39 points at 10,195
- Trump threatens tariffs to Denmark, UK, Germany and others
- EU weighs response ahead of Davos summit
5.30pm: FTSE in the red
The FTSE 100 closed down 39 points at 10,195 amid rising US-European trade tensions.
4.08pm: FTSE down but not much
A solid loss for the FTSE looks on the cards for today, but far from as bad as it could be (and could still yet get).
While the London index is down 0.3%, Continental European peers are still being hit harder, with the DAX down 1.2% in Frankfurt and the CAC down 1.7% in Paris.
Analysts have said that markets are taking it fairly calmly so far, on the basis that Trump will back down in some way.
London's benchmark is being supported by a 43% gain from Beazley, and a 9% rise at fellow insurer Hiscox.
Gold miners and defensives like tobacco and utilities are also catching a bid or two.
3.23pm: Beazley board mulling new offer
Beazley's board has responded to the possible offer from Zurich Insurance, confirming that it rejected a bid on 4 January and received an unsolicited, conditional cash proposal at 1,230p per share, which it unanimously rejected as it "significantly undervalued the company".
The board says it has "not yet had the chance to consider" today's 1,280p improved proposal but "will update shareholders in due course".
It was noted that Zurich has a put-up-or-shut-up deadline of 5pm on 16 February.
2.37pm: Zurich goes public with bid for Beazley
Insurer Beazley PLC (LSE:BEZ) has been offered 1,280p per share in cash from Zurich, with the Swiss giant going public with a statement.
This price is a 56% premium to Beazley's closing price on Friday and a 32% premium to its all-time high.
It follows a previous proposal of 1,230p on 4 January that was rejected by Beazley's board.
Zurich said the new proposal "provides full value for Beazley across all relevant metrics, and is designed to facilitate prompt engagement".
Beazley has not yet responded, with the Swiss suitor suggesting the value of its bid exceeds what Beazley could achieve under its standalone strategy.
1.27pm: Not all gold miners are flying
While precious metals miners Fresnillo and Endeavour are up 4.4% and 1.9%, not all precious metals miners are flying on the rising prices.
Hochschild Mining PLC (LSE:HOC) is flat after being downgraded to 'neutral' from 'overweight' by JPMorgan, which has also placed the stock on 'negative catalyst watch' as it urges investors to become more selective across European gold miners ahead of the fourth-quarter reporting season.
In a sector note, JPMorgan said it remains broadly bullish on gold equities but sees “some room for stock-specific downside risks” as results approach, including creeping cost inflation and the prospect of higher government royalties in countries such as Ghana and Côte d’Ivoire.
Against that backdrop, the bank said it was reducing its conviction on Hochschild while maintaining a positive stance on preferred names.
JPMorgan reiterated 'overweight' recommendations on Fresnillo and AngloGold Ashanti, citing attractive valuations, mark-to-market upside versus consensus expectations and strong potential for excess cash returns across the subsector.
12.15pm: Nothing new
Moving into the afternoon and the losses for continental European stock markets remain sharper than in London.
After French President Emmanuel Macron said in response to Trump's new tariff threats that EU should activate its Anti-Coercion Instrument, nicknamed the "trade bazooka", Germany's finance minister has confirmed agreement.
"Everything must be prepared now," said Lars Klingbeil, who is also Germany’s vice chancellor, adding that "we are ready to find solutions, we are extending our hand, but we are not prepared to be blackmailed.
"We are constantly experiencing new antagonism, which President Trump is seeking. And here we Europeans must make it clear that the limit has been reached."
A reminder that, while at this point many would be looking ahead to the start of trading in Wall Street, today is a national holiday in the US.
Investors are still bracing for a busy week, says David Morrison, market analyst at Trade Nation, with a mix of corporations scheduled to report earnings, including Netflix, 3M and United Airlines tomorrow, then Johnson & Johnson, Halliburton and Charles Schwab on Wednesday, with Intel, Procter & Gamble and Abbott Labs on Thursday.
The Fed’s preferred inflation measure, core PCE, is also released on Thursday.
As for the London calendar this week, tomorrow's macro news is on UK jobs and on Wednesday it's inflation, while the corporate diary includes 4imprint and QinetiQ tomorrow; Wednesday brings Rio Tinto, Experian, Burberry, JD Sports, Currys, JD Wetherspoon and Premier Foods; with AB Foods, B&M European Value, Harbour Energy and Wickes on Thursday.
Next week is a bigger deal, especially for big tech, with Microsoft, Meta, Tesla, ASML and IMB on the 28th, a day before Apple is joined by Visa, Mastercard and Caterpillar.
11.42am: China's birthrate sinks to new record low
An interesting bit of demographics - China’s population has fallen for the fourth year in a row, with the population dropping by 3.4 million to 1.4 billion.
The birthrate fell to its lowest since records began three-quarters of a century ago, with 7.9 million registered births in 2025, representing less than six births for every 1,000 members of the population (versus over 16 in India, over 10 in the US and over eight in the EU in latest figures from previous years).
This is down 17% from 9.54 million births in 2024, and the lowest since records began in 1949, according to fugures from China’s National Bureau of Statistics (NBS).
As well as a lower birthrate, deaths rose to 11.3 million from 10.93 million.
Beijing has been trying to boost the birthrate, including launching a nationwide childcare subsidy programme.
10.55am: Stock markets deep in the red
The FTSE 100 has sunk lower over the past hour, down 0.7%, while German and French benchmarks are down 1.5% and 1.6%.
Industrials such as Diploma, Spirax, Croda and Halma are among the bigger fallers, along with financials and internationally focused retailers, with names such as NatWest, Burberry, 3i Group, St James's Place and Barclays close behind.
"European Markets are understandably downbeat in early trade today following the shocking events of the weekend which ramped up concerns over a complete breakdown of the NATO coalition," says market analyst Joshua Mahony at Scope Markets.
He says Trump's decision to announce tariffs on a raft of European nations "is perhaps one of the most egregious cases of blackmail against an ally in living memory".
"While many made peace with the unorthodox Venezuela operation given the claims of drug trafficking and population suppression, Trump’s attempts to force the transfer of a fellow Nato member’s land takes things a step further."
He says the Trump administration's claims that Greenland is related to security concerns "doesn’t quite ring true given the fact that the US has opted to shrink their military operations on the island despite being allowed to expand it".
If Trump takes a hard line on this issue it would "put another nail in the coffin of the US-led Western alliance as we know it, bringing a potential trade war that could escalate into something that serves to damage growth and spark a fresh rise in inflation pressures".
10.13am: Starmer speech on Greenland tariffs and response
Prime Minister Keir Starmer has finished his press conference, which he began by stating that the world "has become markedly more turbulent in recent weeks. Events are moving fast, and in moments like this, what matters most is being clear about the values and the interests that guide us, even as circumstances change."
Starmer said he does not want a trade war with the US, that tariffs would not be in anyone’s interests.
"I say the use of tariffs against allies is completely wrong. It is not the right way to resolve differences within an alliance. Nor is it helpful to frame efforts to strengthen Greenland’s security as a justification for economic pressure."
He went on: "A trade war is in no one’s interest and my job is to act always in the UK’s national interest. That is why yesterday I spoke to President Trump, to European leaders and to the Secretary General of NATO, to find a solution rooted in partnership, facts and mutual respect."
He said "strong alliances protect shared interests", applying this to other geopolitical issues too, and that the UK "welcomes" President Trump’s focus on moving onto "Phase 2" of his Gaza plan where "we are open to participating constructively in such efforts." On Ukraine, the PM said "we strongly support efforts to bring the killing to an end and to secure a ceasefire as soon as possible".
Ed Davey, the Lib Dem leader, called for the UK to join the EU in imposing retaliatory tariffs on the US, saying Trump’s move is an attempt "to ransom us over the sovereignty of a Nato ally is an act of economic thuggery that cannot go unanswered".
9.51am: WH Smith appoints new chair
Investors seemed pleased with the appointment by WH Smith of former Balfour Beatty and Qinetiq boss Leo Quinn as its new executive chairman.
The shares are up over 9% this morning, but still well off the levels seen before August's profit warning.
Quinn, who led construction group Balfour's through a decade's transformation from 2015, will start in April, replacing Annette Court when she steps down as chair and non-executive director at the end of the annual meeting on 2 February.
A meeting is being convened for investors to approve the appointment.
Major shareholder Causeway Capital has endorsed Quinn. Fund manager Jonathan Eng says: "WH Smith urgently needs a leader who is disciplined on capital spending and focused on rebuilding North American margins. As CEO of Balfour Beatty, Leo Quinn transformed the company from a poorly managed, loss-making UK infrastructure group to one winning contracts, generating cash, and delivering a total shareholder return more than three times that of the FTSE 250 during his tenure."
8.58am: European markets rocked
Various thoughts and comments on the situation this morning, as the FTSE sits 0.2% lower but on the European mainland the German DAX is down 1.03% and France's CAC 40 has lost 1.26%.
Peel Hunt economist Kallum Pickering: "Short of any actual developments – US tariffs are not due to take effect until 1 February and Europe is still considering its response – the initial reaction by financial markets is modest, albeit directionally telling. Gold, silver and government bonds are up, while equities and the dollar are lower; all consistent with a risk-off move focused on the potential risks to the US. Note, US markets are closed today for Martin Luther King Jr Day.
"Markets could rebound or move lower depending on what Europe decides to do and whether the mood between the US and Europe at this week’s World Economic Forum is conciliatory or antagonistic. As part of the EU’s initial response, it could halt the EU-US political framework deal agreed in July 2025. The agreement established a 15% US tariff ceiling on EU goods and included EU commitments for increased US energy, military, and industrial purchases."
Derren Nathan, head of equity research at Hargreaves Lansdown, calls it an "extraordinary weekend of economic sabre-rattling over Greenland", with Trump tariff threats including three of the world’s largest economies and the mooted European Union €93 billion tariff response including a never-before-used ACI (anti-coercion instrument), which would further limit US companies' access to major contracts across the single market.
"The UK is yet to make a formal response, but the Prime Minister will address the nation today at 2:30pm after reiterating his opposition to Washington’s desire to take control of Greenland in a call with Donald Trump on Sunday," says Nathan.
"The market reaction to this escalation has been relatively muted compared to the post-liberation day sell-off seen last April. Given the President’s history of dramatic threats and last-minute stand-downs, investors may be pricing in a generous degree of bluff in this high-stakes poker game."
This year’s theme at the World Economic Forum in Davos, which starts today, is ‘Spirit of Dialogue’.
Nathan says if it "turns out to be more ironic than prophetic, there’s scope for a steeper dip in risk-on assets. With everyone from Presidents Trump & Zelensky through to NVIDIA’s CEO descending on the alpine village this week, the flies on the wall should be party to some tense conversations."
Kathleen Brooks at TXB says: "The price reaction to the US’s aggressive stance on Greenland and Europe will depend on how traders see the situation playing out in the long term.
"We see three risks. The first is a breakdown in transatlantic relations, which has economic and political ramifications. Second, although Nato allies have had spats before, this is different.
"If Trump walks away from NATO, then it will be much harder for Europe to contain Russia, this boosts uncertainty and could hit investment across the Continent.
"Lastly, if the President does not back down from his latest tariff threat, then it suggests a new stage in the US’s trade wars, one where tariffs are applied randomly so that the President can use economic force to get his way. This would be a dangerous development for the global economy."
8.32am: EU response
European capitals are weighing tariffs on up to €93 billion of US goods in response to pressure from Washington over Greenland.
EU officials are preparing a retaliation package, according to the Financial Times, that could also include limits on American companies’ access to the single market, should President Trump follow through on threats against Nato allies.
It was pointed out over the weekend that European countries own $8 trillion of US bonds and equities, almost twice as much as the rest of the world put together.
The EU's potential retaliatory measures are intended less as an opening salvo than as leverage, with leaders hoping the prospect will steady talks with Trump at this week’s World Economic Forum in Davos and avert a rupture in Nato.
8.15am: FTSE drops, but gold miners and defence prevent worse
The FTSE 100 dropped only slightly in opening trades, falling 30 points to 10,205.
Industrials, medical products, retailers, financials and aerospance firms were among the fallers.
Hip replacement group Smith & Nehpew, engineer Spirax Group, construction hire specialist Ashtead and booze producer Diageo were all down over 2%.
At the other end, precious metals miners Fresnillo and Endeavour Mining were top of the risers, up 4.9% and 2.65%, followed by defence contractors, Babcock International and BAE Systems, up 2.7% and 1.25%.
7.43am: Gold and silver surge
The price of gold has surged to a new high this morning, no doubt in demand as a safe haven asset on the back of the extra economic uncertainty injected by Trump's tariff threats.
Spot gold has risen more than 1.5% to $4,666 per ounce.
Silver is up 4% at £93.50/oz.
7.33am: 'Not all doom and gloom'
"It’s not all doom and gloom though," says Deutsche Bank's Jim Reid, pointing to Korea's Kospi index up 1.45%, "outperforming due to gains in chipmakers, following the announcement from US giant Micron Technology Inc that it will acquire a plant from Taiwan’s Powerchip Semiconductor Manufacturing Corp for $1.8 billion".
He notes that there is no Treasury cash trading due to the Martin Luther King Day holiday in the US, but US bond futures are slightly lower and European equivalents slightly higher.
The US dollar is also "not seeing safe haven flows after the weekend news", Reid adds.
"There will be hundreds of different opinions on how this will all pan out but remember that the tariffs announced on Liberation Day were ultimately softened a week later, on the day that long-end US Treasury yields saw a scary Asian session as international investors started to vote with their feet in terms of US funding.
"So financial markets may play a big part in how this situation resolves itself. The main Achilles Heel of the US is the huge twin deficits.
"So while in many ways it feels like the US holds the economic cards, it doesn’t hold all the funding cards in a world that will be very disturbed by the weekend’s events.
"It also remains to be seen what political benefit there would be for President Trump domestically given that the mid-terms are widely believed to likely be about the cost of living.
"In addition, a Reuters/Ipsos poll last week suggested that only 17% of US citizens supported efforts to acquire Greenland, with 47% against. Only 4% approved of using military force with only 8% of Republican voters agreeing."
7.15am: Global sell-off sparked by Trump's Greenland-related tariffs
The FTSE 100 is predicted to start the week in the red after Donald Trump threatened new tariffs against nations objecting to the US purchasing Greenland.
London's blue-chip index has been called 64 points lower on the futures market, following a largely flat session at the end of last week. Over the five days, the UK benchmark gained over 110 points, hitting an intraday high above 10,257 and ending at 10,235.29.
In a social media post over the weekend, Trump said a 10% tariff would be levied from the start of February, rising to 25% in June, would be levied against all of the countries objecting to his Greenland plan, namely, Denmark, Norway, Sweden, France, Germany, The United Kingdom, The Netherlands, and Finland.
"This tariff will be due and payable until such time as a Deal is reached for the complete and total purchase of Greenland," he said.
European stocks are expected to fall even further, with Germany's DAX called over 300 points or around 1.2% lower, and France's CAC expected to drop over 150 points or 1.9%.
Asian markets are mostly in the red this morning, led by the Hang Seng in Hong Kong, down 1.1%. US futures are down too, with the tech-led Nasdaq down 1.3% and the S&P 500 down almost 1%.