Investors are on edge, as they watch the approaching deadline of a possible 30% US duty on goods from Europe.
The macroeconomic uncertainties are expected to affect the overall market. While the corporate news was positive, such as a large investment into the UK’s Sizewell C project.
The Start of a Cautious Year Despite the Threats to Tariffs
Futures data by IG indicates that most European bourses will have a bad start for the week: London’s FTSE is projected to start 0.3% down, France’s CAC is predicted to start 0.3% lower as well, Germany’s DAX should open 0.4% lower and Italy’s FTSE MIB could start 0.4% lower.
The cautious attitude has continued since US President Donald Trump, who announced in early July that the US would be imposing a new 30% duty on EU goods. This tariff is scheduled to go into effect on 1 August.
The EU may have stated that it hopes to reach a trade agreement before the deadline, but an agreement is still elusive. Policymakers in the EU are considering taking retaliatory action if they cannot come up with a solution.
US Treasury Secretary Scott Bessent reinforced on Monday the hardline position of the administration, saying that high tariffs on certain countries will “put more pressure” on them to reach better agreements.
Global market backdrop: Wall Street records, Asia mixed
Alphabet’s pre-earnings surge helped boost the S&P 500, and Nasdaq Composite to new record highs.
S&P 500 gained about 0.1%, and Nasdaq Composite nearly 0.4%. Both indices reached new intraday records and closed at record levels.
Dow Jones, on the other hand, was marginally underperforming and finished the day slightly lower. US stocks futures are little changed during early European morning hours.
Asia-Pacific shares traded in a mixed manner overnight. Japanese stocks were notable for reopening at a higher level as investors assessed the impact of upcoming elections in Japan, where the ruling coalition was defeated in its upper house.
British Gas invests PS1.3B at Sizewell C
The UK’s utility company Centrica (owner of British Gas) has made a significant announcement. It announced that it would invest PS1.3 billion (1.75 billion dollars) in the construction of Sizewell C, a nuclear power station.
The British government gave final approval to the project on Tuesday, making it the largest new nuclear venture for Britain in many decades. Centrica’s shares rose more than 4% on this news.
The ownership structure for the project has been finalized. British Gas’ Centrica, which owns British Gas, will hold 15%, while the British Government will have 44.9%. La Caisse, a Canadian investment fund, will hold 20%. EDF, based in France, will hold 12.5%. Amber Infrastructure Group, a British company, will hold the remaining 7.6%.
Centrica stated in a press release that this deal allows a return on equity (ROE) of 10.8% and it anticipates that its equity stake will increase to approximately PS3 billion when commercial operations begin in 2030.
On Tuesday, the UK government announced that Sizewell C along with the new modular small nuclear reactors to be constructed by Rolls-Royce, and the Hinkley Point C delayed power plant would deliver collectively “more nuclear energy to the grid” than in the past half-century combined.
A related development is that US private credit giant Apollo, announced in December that it will provide a PS4.5billion ($6billion) loan to Hinkley Point C. This project has been controversial on the grounds of national security due to its high level of Chinese funding.
The post Europe Markets Open: Equities Dip as US Tariff Deadline Nears; Centrica Rises could be updated as new developments unfold.
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