FTSE 100 flat as investors assess mixed corporate earnings
Rolls-Royce was among the top performers on the blue-chip FTSE 100 index, up 1.7% after the jet engine maker said it could offset global tariffs to meet 2025 profit targets.
The aerospace and defence index gained 1.1%.
Premier Inn owner Whitbread jumped 5.8% on a share buyback plan and an upbeat bookings outlook, boosting the travel and leisure index, which led sectoral gains with a 3.4% rise.
Informa advanced 4.2% as the events and academic publishing group reaffirmed its 2025 outlook.
Haleon gained 3.3% after the consumer healthcare group raised its medium-term profit forecast.
Keeping gains in check, Lloyds Banking Group dropped 2.7%, after reporting a near 7% drop in first-quarter profit.
National Grid fell 1.1% after the company said CEO John Pettigrew was stepping down. The midcap index gained 1.3%.
Ukraine-focused miner Ferrexpo soared 22.2%, the biggest rise on the index, after Washington and Kyiv struck a minerals deal.
While mostly positive quarterly results helped calm the market, a social media account affiliated with Chinese state media said that the US had approached China seeking talks over President Donald Trump's 145% tariffs, potentially signalling Beijing's openness to negotiations.
Back home, British homebuyers increased their mortgage borrowing by the most in nearly four years in March as they rushed to beat the end of a tax break, but Bank of England data also showed signs of caution among consumers.
Meanwhile, investors added to their bets on BoE interest rate cuts over the remainder of this year and short-dated government bond yields fell sharply ahead of the central bank's meeting next week.
Separate data showed British factory exports shrank at their sharpest pace in almost five years and cost pressures intensified in April.
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Express Tribune
2 hours ago
- Express Tribune
Trump's belligerence drives a major shift in Indo-Pacific
The author writes on geopolitical issues and regional conflicts. He can be reached at Listen to article Donald Trump's implacable belligerence has tutored traditional American allies to quickly adjust to new geopolitical realities or truckle to his ceaseless demands. An increased sense of urgency across Europe and the Indo-Pacific implies that they have decided to take up the gauntlet of diversifying their partnerships. In a rare show of displeasure at the US president's stubborn arrogance, Australian Prime Minister Anthony Albanese during his China visit sought to stabilise relations and manage differences to "contribute" to regional peace and prosperity, holding a "constructive" meeting with Chinese President Xi Jinping to underscore Beijing's importance for "our economy, our security and the stability of our region". Beijing is Canberra's largest trading partner with almost a third of Australia's exports destined for China and bilateral trade hitting 312 billion Australian dollars in 2024. The two economies are highly complementary, meaning China has a huge demand for Australian goods and services. This symbiotic bond, unlike the Australia-US parasitistic trade ties, provides a sound footing to tap the opportunity and strengthen the extensive relationship. China's investments contribute to infrastructure development, productivity and job creation in Australia; and its development, opening-up and rising middle class unleash new vistas for Australian exporters. As members of Asia-Pacific Economic Forum and Regional Comprehensive Economic Partnership, both countries also have shared interests in safeguarding regional stability and prosperity. In the face of rising protectionism and unprecedented volatility in global trade due to Trump's unilateral tariffs, a stable and strengthened Australia-China relationship would ensure the Australian economy to withstand and navigate strenuous trials and continue to make a positive impact on domestic workers, employers and industries. The strengthening of the Beijing-Canberra ties has ushered in a wave of optimism among Australian businesses with 75% of foreign firms in a poll by the Australia-China Chamber of Commerce reporting profitability in 2024. Their enthusiasm — because 70% rate China as one of their top three destinations for investment over the next three years — reinforces Beijing's appeal as a hub of innovation and industrial transformation. Canberra's intent to "do more business with China" was reflected in its Trade Minister Don Farrell's interview in which he refused to budge to US pressure, emphasising that Chinese trade was nearly 10 times more valuable to Canberra. "We'll make decisions... to engage with China based on our national interests and not on what the Americans may or may not want." Nonetheless, disparity between Albanese's and the country's defence department's approaches risks derailing Australia's newfound charm offensive against China. For instance, Canberra has been accusing Beijing of spearheading the largest and most ambitious military buildup since the Second World War. Its Defense Minister, Richard Marles, recently echoed such an assertion. Yet this assessment has long been contested by none other than Australia's own analysts and former diplomats who believe the Chinese strategy is essentially inward looking, focusing internal stability and external security. Even leading Western investigations reveal that the US, by far, outspends China in defence spending and that Beijing's military development and the record of use of force are relatively restrained. Conversely, Trump's return is spurring new challenges for the Albanese government. After the Biden administration wanted to get Canberra "off the fence" by locking it for the next 40 years through AUKUS, Trump's AUKUS-skeptic undersecretary of defense Elbridge Colby is leveraging the trilateral partnership to hard-press Australia into making pre-commitments if a US-China war breaks out on Taiwan. The Trump administration is also pressurising Australia to increase defence spending to 3.5% of the GDP. Canberra has hitherto resisted the US pressure for it would cost Australia tens of billions of dollars. For an economy that will remain in a structural deficit through 2034-35, a defence splurge would indeed imperil Albanese's social policy agenda. Trade with China has helped Australia put the cost of living on a downward trajectory. Studies show that this trade relationship has increased disposable income of Australian households by an average of 2,600 Australian dollars, supporting around 600,000 jobs. While US maintains 10% baseline tariff on Australian goods, 25% on automobiles and 50% on steel and aluminum, Beijing thanks to the China-Australia Free Trade Agreement applies an average of just 1.1%, urging Canberra to rethink before jumping on Washington's bandwagon vis-à-vis Beijing. No wonder China is seen as a more reliable trade partner than the US by Australians with a sizeable majority of them (71%) agreeing that the country's relationship with Beijing is important. This comes as Trump has upended the long-held assumption that America could be a dependable ally, stoking a belief in many Aussies whether it could even act responsibly. Establishing diplomatic relations, Beijing and Canberra in 1972 agreed to develop the relationship on the basis of the principles of mutual respect for sovereignty, mutual non-aggression, non-interference in internal affairs, equality, mutual benefit and peaceful coexistence. These fundamental tenets laid the foundation of a robust Beijing-Canberra relationship as people across the two countries lived together peacefully through decades. Should Australia chuck out its schizophrenic ambivalence, both nations can still pioneer the way for a resilient strategic partnership and a secure and thriving Indo-Pacific.
Express Tribune
3 hours ago
- Express Tribune
China is catching up with the United Sates
Listen to article David Autor and Gordon Hanson, two economic professors known for their research into how globalisation and especially the rise of China is reshaping the American labour market, contributed an article to the Opinion pages of The New York Times. The article was titled "Did we learn nothing from the 'China Shock'?" They wrote: "The first time China upended the U.S. economy between 1999 and 2007, it helped erase nearly a quarter of all technological jobs. Known as the 'China Shock', it was driven by a singular process — China's late 1970s transition from Maoist central panning to a market economy, which rapidly moved the country's labor and capital from collective rural farms to urban factories. Waves of inexpensive goods from China imploded the economic foundations of places where manufacturing was the main game in town... Twenty years later, these workers haven't recovered from those job losses. Although places like these are growing again, most job gains are in low-wage industries such as textiles, sporting goods electronics and auto parts." China's transition to manufacturing was complete once Chairman Deng Xiaoping succeeded Mao as the supreme leader. He opened the country to the outside world and invited foreign participation in China's development. While what Autor and Hanson described in their 2013-16 research story has lost its relevance, they have begun to focus on what they call China Shock 2. This has seen the transition from China as an underdog and is successfully developing innovative sectors such as aviation, AI, telecommunications, microprocessors, robotics, quantum computing, biotech, pharma and solar batteries. To quote again from the authors, "In the 1990s and 2000s, private Chinese businesses working alongside multinational corporations had turned China into the world's factory. The new Chinese model is different. China has created an agile, if costly, innovation system in which local officials such as mayors and governors are rewarded for growth in certain advanced sectors. An example of the outcome is the city of Hefei located in a poor hinterland province. By putting up venture funding, taking risks on supporting EV (electric vehicles) producers, and investing in local research and development, Hefei made the leap into the country's top industrial tier in barely half a decade." China is now the world's largest and most innovative producers of electric vehicles. BYD (EV), CATL (EV batteries), DJI (drones) and LONGi (solar wafers) are all Chinese startups, none more than 30 years' old. The rest of the world, including the United States, is ill prepared to compete with these privately owned but state-supported enterprises. If the extent to which China has drawn not only even but overtaken the United States, we might look at the study done by the Australian Strategic Policy Institute, a think-tank. According to the Institute, the United States led China in 60 of 64 frontier technologies, such as AI and cryptography, from 2003 to 2007, while China led the United States in just three. In the Institute's most recent report, the rankings were flipped. China led in 57 of 64 key technologies while the United States had the lead in only seven. Autor and Hanson are proposing a four-pronged approach to the Chinese challenge. First, the US should work with other old economies that face similar challenges such as the European Union, Japan and South Korea rather than imposing tariffs. Second, the US government should encourage China to build in America high technology plants such as those developing rare earth minerals as well as those making batteries and electric vehicles. The government should get involved in developing the industries that produce these items. At the time of the WWII, the Office of Scientific Research and Development brought major developments in jet propulsion, radar and mass-produced penicillin. Later, NASA accepted the Soviet Union challenge which sent the first astronaut to circle the earth by sending and bringing back men to and from the moon and launched the Operation Warp Speed which partnered with pharmaceutical companies to produce a Covid-19 vaccine faster than any other major vaccine had been produced. The third area of government sponsorship, the authors advocate, is for the United States to choose the battles that it can win (semiconductors) or those it cannot afford to lose (development of rare earths). The fourth priority is to prevent the devastating impacts of job loss from the next major shock. Tariffs, President Trump's preferred policy option to deal with the challenges the country faces, is not right for the actions needed. The authors conclude their assessment with the following words: "We must nourish industries that have high potential for innovation, funded by joint investments by the public and private sectors. These industries are in play globally, something China figured out a decade ago. America should stop fighting the last trade war and meet China's challenge in the current one." These ecosystems, with the government in the lead, will need supporting infrastructure: reliable and inexpensive energy generation, rare earths, modern shipping and universities with vibrant STEM programmes. This will mean pulling back from subsidising legacy sectors such as coal and oil; restoring federal support for scientific research; and welcoming rather than demonising the talented foreign arrivals into the country who would help the country they have adopted as their own to move forward. This is not the direction in which America, under Trump, is headed. President Trump acted out the programme laid out by Elon Musk, the world's richest man who joined Trump to redesign and refocus the public sector. His DOGE programme was aimed at reshaping the government but it did more damage than good. His moves reduced the country's capacity to innovate. On July 21, major newspapers took out full-page advertisements that said the following in bold letters: "America doesn't settle for second place in Science. We don't play catch up. We build what others copy. Invent what others copy. The science that wins on the battlefield and finds breakthrough in the bloodstream — that's the sharp edge of American power. American science that is funded by the federal government is launched from the flight deck. Developed by American industry. Proven on our factory floors. And tested on the front line - everyday. The only thing American science can't do. Fund itself. That depends on the wisdom and leadership of those we send to Washington." With Donald Trump occupying the White House, that is not happening.
Express Tribune
5 hours ago
- Express Tribune
US, China to resume tariff talks in effort to extend truce
US and Chinese flags and a "tariffs" label are seen in this illustration created on April 10, 2025. Photo: Reuters Listen to article Senior US and Chinese negotiators meet in Stockholm on Monday to tackle longstanding economic disputes at the centre of the countries' trade war, aiming to extend a truce keeping sharply higher tariffs at bay. China is facing an August 12 deadline to reach a durable tariff agreement with President Donald Trump's administration, after Beijing and Washington reached a preliminary deal in June to end weeks of escalating tit-for-tat tariffs. Without an agreement, global supply chains could face renewed turmoil from duties exceeding 100%. The Stockholm talks, led by US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng, take place a day after European Commission President Ursula von der Leyen meets Trump at his golf course in Scotland to try to clinch a deal that would likely see a 15% baseline tariff on most EU goods. Also Read: Israel announces daily pauses in Gaza fighting as aid airdrops begin Trade analysts on both sides of the Pacific say the discussions in the Swedish capital are unlikely to produce any breakthroughs but could prevent further escalation and help create conditions for Trump and Chinese President Xi Jinping to meet later this year. Previous US-China trade talks in Geneva and London in May and June focused on bringing US and Chinese retaliatory tariffs down from triple-digit levels and restoring the flow of rare earth minerals halted by China and Nvidia (NVDA.O), opens new tab H20 AI chips and other goods halted by the United States. So far, the talks have not delved into broader economic issues. They include US complaints that China's state-led, export-driven model is flooding world markets with cheap goods, and Beijing's complaints that US national security export controls on tech goods seek to stunt Chinese growth. "Stockholm will be the first meaningful round of US-China trade talks," said Bo Zhengyuan, Shanghai-based partner at China consultancy firm Plenum. Trump has been successful in pressuring some other trading partners, including Japan, Vietnam and the Philippines, into deals accepting higher US tariffs of 15% to 20%. He said there was a 50-50 chance that the US and the 27-member European Union could also reach a framework trade pact, adding that Brussels wanted to "make a deal very badly". Read: Six killed, scores injured in Indian temple stampede Two of Trump's top trade officials, Commerce Secretary Howard Lutnick and US Trade Representative Jamieson Greer, will attend the Scotland talks and then travel to Stockholm. Analysts say the US-China negotiations are far more complex and will require more time. China's grip on the global market for rare earth minerals and magnets, used in everything from military hardware to car windshield wiper motors, has proved to be an effective leverage point on US industries. Trump-Xi meeting? In the background of the talks is speculation about a possible meeting between Trump and Xi in late October. Trump has said he will decide soon whether to visit China in a landmark trip to address trade and security tensions. A new flare-up of tariffs and export controls would likely derail any plans for a meeting with Xi. "The Stockholm meeting is an opportunity to start laying the groundwork for a Trump visit to China," said Wendy Cutler, vice president at the Asia Society Policy Institute. Bessent has already said he wants to work out an extension of the August 12 deadline to prevent tariffs snapping back to 145% on the US side and 125% on the Chinese side. Still, China will likely request a reduction of multi-layered US tariffs totaling 55% on most goods and further easing of US high-tech export controls, analysts said. Beijing has argued that such purchases would help reduce the US trade deficit with China, which reached $295.5 billion in 2024. Also Read: Drone debris disrupts trains, suspends flights in Volgograd China is currently facing a 20% tariff related to the US fentanyl crisis, a 10% reciprocal tariff, and 25% duties on most industrial goods imposed during Trump's first term. Bessent has also said he would discuss with He the need for China to rebalance its economy away from exports toward domestic consumer demand. The shift would require China to put an end to a protracted property crisis and boost social safety nets to encourage household spending. Michael Froman, a former US trade representative during Barack Obama's administration, said such a shift has been a goal of US policymakers for two decades. "Can we effectively use tariffs to get China to fundamentally change their economic strategy? That remains to be seen," said Froman, now president of the Council on Foreign Relations think-tank.
