London Pre-Open: Stocks to Nudge Down After US Tech Selloff

Economic

Stocks

Summary:

London stocks are set to open slightly lower, tracking U.S. tech-led losses driven by concerns over Chinese AI firm DeepSeek. Retail price deflation eased in January, but upcoming cost pressures could reignite inflation.

London stocks were set to nudge lower at the open on Tuesday following heavy losses on the S&P 500 and the Nasdaq.

The FTSE 100 was called to open around five points lower.

On Monday, the Dow and the S&P 500 closed down 3.1% and 1.5%, respectively, led by a selloff in the tech sector amid concerns about Chinese AI app DeepSeek.

Kathleen Brooks, research director at XTB, said: "The one thing that is bigger than the AI story right now is Donald Trump. His thoughts on DeepSeek’s cheap AI large language model were always going to be important for traders, however, he didn’t dwell on DeepSeek for long.

"Instead, he stated his desire for ‘much bigger’ universal tariffs than the 2.5% favoured by the now confirmed Treasury Secretary Scott Bessent. This weighed on stocks during the Asian session, and US and European equity futures are also pointing to a lower open, although losses are not expected to be as sharp as they were on Monday."

On home shores, investors will be mulling the latest data from the British Retail Consortium, which showed that prices at tills decreased in January as retailers offered "deep discounts" on things like furniture and fashion, though upcoming increases to labour-market bills could reignite inflationary pressures in the spring.

According to the BRC-NeilsenIQ shop price index for January, shop prices fell 0.4% month-on-month following a flat reading in December.

While food prices rose 0.5%, up from 0.1% the month before, non-food prices reduced by 0.9% after a 0.1% decline previously.

This meant that shop prices were 0.7% lower than they were in January 2024, following a 1.0% year-on-year fall in December.

The annual rate of food inflation, in particular, eased to 1.6% from 1.8%, coming in at its lowest rate since November 2021.

"Extensive January sales was good news for bargain hunters, with non-food products showing significant discounts, particularly for furniture and fashion, but less good news for retailers needing to shift excess stock," said the BRC's chief executive Helen Dickinson.

“Price cuts and deflation may not last much longer as retailers will soon feel the full impact of £7bn of new costs announced at the last Budget. Higher employer NICs, increased National Living Wage, and a new packaging levy mean that prices are expected to rise across the board," she said.

In corporate news, AstraZeneca and Daiichi Sankyo's Enhertu has been approved in the US for the treatment of adults with HER2 breast cancer, after disease progression having had one or more hormone therapies.

The approval was granted by the Food and Drug Administration based on results from the DESTINY-Breast06 Phase III trial, which were presented at the 2024 American Society of Clinical Oncology meeting and published in The New England Journal of Medicine, the companies said.

Real estate investment trust Segro announced that its joint venture with a Canadian pension fund has bought six logistics assets from Tritax EuroBox for €470m.

The deal, which comprises assets in Breda and Roosendaal in the Netherlands, the Frankfurt corridor and the Rhine-Ruhr region in Germany, comes just four months after a failed takeover attempt by Segro of Tritax.

Molten Ventures announced the appointment of Andrew Zimmermann as its chief financial officer and a director, following his tenure as interim CFO since October.

The FTSE 250 company said Zimmermann, who joined it as finance director in November 2023, was bringing extensive experience from roles at IPGL, the Carlyle Group, and other prominent financial institutions. It said he was also joining the board of directors, and was expected to stand for re-election at the July annual general meeting.

Source: Sharecast

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London Pre-Open: Stocks to Nudge Down After US Tech Selloff

Source: Sharecast

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