Daily market update: Coca-Cola HBC, British American Tobacco, Imperial Brands, Haleon, Speedy Hire

“The prospect of a full-blown trade war has spooked investors as they weigh up the prospect of widespread retaliation by countries on the receiving end of Donald Trump’s tariff frenzy,” says Russ Mould, Investment Director at AJ Bell.

“Affected countries aren’t going to take the hit lying down and a tit-for-tat scenario is now looking real. That could result in higher inflation and put a stop to further interest rate cuts for the time being – exactly the opposite of what equity investors want to happen.

“Higher prices could hurt demand, and there might be a trickle-down effect that knocks business and consumer confidence and feeds into weaker economic activity.

“The start of February is meant to raise hopes as the sun sets later in the day and we see the first signs of gardens springing back to life. Instead, we’ve got a nasty chill and a sea of red flashing on the markets.

“Japan’s Nikkei 225 index fell 2.7%, Germany’s DAX dropped 2.1% and Spain’s IBEX retreated 1.8% while the UK’s FTSE 100 declined 1.2%. Futures prices imply another weak session for the US with an indicated 2% decline in the Nasdaq and a 1.6% drop in the S&P when Wall Street reopens for trading.

“The fact markets have got the jitters implies investors previously weren’t entirely convinced that Trump would go ahead with tariff threats. Instead, it was presumed these threats would simply be a bargaining tactic. Trump talks a lot but doesn’t always follow through; perhaps this time he wants people to take him more seriously, hence why the prospect of negotiations has been thrown out of the window. Fight first, talk later.

“There were only four stocks in positive territory on the FTSE 100 in early trading: Coca-Cola HBC, British American Tobacco, Imperial Brands and Haleon. That sums up the mood perfectly. A can of coke, a cigarette and some headache tablets are simple things that could bring someone small relief in the face of chaos.

“There was firmly a risk-off mood with investors. Tech stocks were on the scrapheap amid the prospects of rates staying higher for longer. Implied interest rate strength was also bad for real estate stocks, throwing cold water over the idea that we’re on a trajectory for cheap borrowing. Miners retreated as investors feared about a pullback in economic activity and how that would hurt commodities demand.

“Speedy Hire crashed 28% on a profit warning linked to a weak start to 2025 and a delay in rail works. In good times, equipment companies benefit from rising rental income and they reinvest money back into the business to expand their fleet. In bad times, they suffer weaker rental fees and typically stop buying more equipment. Speedy Hire needs to decide whether market issues are short-term setbacks or the start of something more serious.”

These articles are for information purposes only and are not a personal recommendation or advice.