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UK shares initially rose on Thursday, experiencing broad-based gains after U.S. President Donald Trump announced an immediate 90-day pause on several tariffs, providing relief to investors following the recent global market downturn. However, the blue-chip FTSE 100 reversed its 4.5% gain to close down 2.5%, mirroring another global shift in risk sentiment; most S&P 500 sectors declined, led by information technology and energy, which dropped 3.5% and 3.9%. Consumer staples was the only sector with gains. Major growth stocks like Tesla and Nvidia fell over 4% each. The CBOE Volatility Index, Wall Street's "fear gauge," decreased from August highs but rose 16% during the session. In a notable policy change on Wednesday, Trump lifted many significant tariffs just a day after they were imposed, offering some relief to unsettled global markets. Simultaneously, he escalated the trade dispute with China by raising tariffs on Chinese goods to 145% from 104%, which had only begun on Wednesday. In response, the European Union announced on Thursday that it would pause its initial counteractions against Trump's tariffs for 90 days, as stated by European Commission President Ursula von der Leyen on X. Nevertheless, Trump's tariff reversal is not comprehensive, as the 10% blanket duty on most U.S. imports remains in place, according to the White House. Existing tariffs on automobiles, steel, and aluminum also remain unchanged. A sharp selloff in U.S. Treasury bonds on Wednesday, which reignited concerns about the fragility of the world's largest bond market, showed signs of easing. British 30-year government bond yields also retreated sharply on Thursday as tensions in the fixed income market eased..

Single Stock Stories & Broker Updates:

• Tesco's shares drop 4% as it projects FY25-26 adjusted operating profit between £2.7-3 billion, down from £3.13 billion last year. The company cites increased competition in the UK's market and announces a £1.45 billion share buyback by April 2026. FY group sales reach £63.6 billion, a 3.5% increase year-on-year, with like-for-like sales up 3.1%. TSCO is down ~8.98% year-to-date.

• Hikma Pharmaceuticals shares rise 5% to 1,864p, aiming for the biggest one-day jump since Aug 8, 2024. Jefferies upgrades the stock to "buy" and raises the price target from 2,090p to 2,400p, citing growth potential in contract manufacturing and undervaluation in US Generics. The company is well-positioned in the MENA region, leveraging local industry insights. Recently, it signed a licensing agreement with Pharma& for innovative oncology treatment in MENA. The average rating is "buy" with a median price target of 2,450p. HIK is down ~6.5% YTD.

• Shares of Mears Group rise 12.62% to 401.50p after reporting FY24 revenue of 1,133 million pounds, exceeding expectations of 1,126 million pounds. The company projects 2025 revenue of at least 1,050 million pounds and adjusted profit before tax of at least 50 million pounds. Peel Hunt upgrades MERG to "buy" with a target price of 405p. Despite uncertainties with asylum seeker contracts, Mears has strong underlying momentum. Median target price from three brokerages is 489.50p; stock is up ~10% YTD.

Technical & Trade View

FTSE Bias: Bullish Above Bearish below 8950

• Primary support 7500
• Below 7400 opens 6850
• Primary objective 9050
• Daily VWAP Bearish
• Weekly VWAP Bearish

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