The FTSE 100 slipped on Tuesday as Asian-focused banks and housebuilders weighed on the index following soft UK house price data and concerns about US-China trade relations.
“Asia-focused financials were lower after the Hang Seng index dropped sharply. The sell-off was linked to news the US is putting several Chinese firms in its crosshairs including Tencent,” said AJ Bell investment director Russ Mould.
There was also a sense of caution ahead of key economic data that has the potential to set the tone for central bank action in early 2025.
The move lower in London came despite a strong session for US indices that look set to leave the FTSE 100 in the dust in terms of performance again in 2025. Chipmaker shares, including Nvidia Micron Technology and Super Micro, led the market higher on the news Microsoft planned to spend big on AI in 2025.
“After a sluggish December, US stocks have kicked off the year in style, with tech and semiconductors stealing the spotlight, buoyed by Nvidia buzz, chatter about Microsoft’s $80bn capex plans, and tariff optimism despite mixed signals from Trump,’ said Matt Britzman, senior equity analyst, Hargreaves Lansdown.
“Nvidia climbed higher on the assumption that a significant portion of Microsoft’s increased infrastructure spending will flow its way, while CEO Jensen Huang delivered a keynote speech at the Consumer Electronics Show, unveiling new gaming cards, autonomous vehicle partnerships, and more. AMD joined the rally with a new chip deal with Dell, while broader markets wrestled with déjà vu over China trade relations and investors remained laser-focused on AI capex and deregulation in the banking sector.”
in the UK, Next was firmly higher after increasing guidance for the year on the back of a very positive festive trading period update.
“As if a billion-pound profit for the year wasn’t enough, Next has gone and nudged the dial again, increasing full year profit outlook for the fourth time in the space of half a year,” said Adam Vettese, market analyst at investment platform eToro.
‘Sales were up 6% for the period leading up to and just after Christmas, significantly higher than the projected 3.5% increase, which has been the same story throughout the year much to the delight of investors.”
“Next is often used as a barometer of the UK retail sector and so far so good with many others due to report this week.”
JD Sports was again among the risers as it rallied in sympathy with Next’s encouraging results. JD Sports shares were ravaged by a series of profit warnings towards the end of last year, which set the stock up for a strong start to 2025.
Banks were a significant drag on London’s markets, with HSBC, NatWest, and Standard Chartered down around 1%-2% due to China concerns.
Taylor Wimpey was the top faller after Halifax said UK house prices fell for the first time since March.