Derren Nathan, head of equity research, Hargreaves Lansdown: “The FTSE 100 is little moved this morning after a flat performance yesterday, but beneath the apparently calm surface, things are choppier than they seem. Commodity stocks have been riding on the coattails of stronger oil and metal prices. That’s offset continued falls in software and data-focussed companies such as Sage, RELX, Experian and the London Stock Exchange Group as herd mentality stokes anxiety around the threats from Artificial Intelligence. Warren Buffett’s mantra of being greedy in times of fear could serve investors well here, as long as they’re prepared to hold for the long-term.
Speciality chemical company Croda International’s 2025 results contained few bangs or flashes but painted a resilient picture as management continue to execute its transformation plan. Revenue grew by 6.6% to £1.7bn before exchange rate moves, and underlying pre-tax profit was up 8.4% to £276mn, slightly ahead of forecasts. Tariff uncertainty made for a tough trading environment for Croda, which was one of Hargreaves Lansdown’s shares to watch in 2025. But broad-based sales growth and efficiency gains have helped support an 11% rise in the share price since the company was highlighted to HL investors. With a similar trading performance expected this year, there could be more to come, particularly if the market gains confidence in the company’s plans to expand underlying operating margins to over 20% over the next three years.
Despite an unprecedented 65% rise over the last year, gold continues to attract safe-haven monies as investors try to assess what the new normal for global trade looks like following last week’s Supreme Court ruling against Donald Trump’s Liberation Day Tariffs and his subsequent threat of a 15% baseline tariff. However, it now looks like the new levy will come in at a more benign 10%, and gold prices have pulled back around 1% after four straight days of gains. Copper prices have been moving on up, benefitting from hopes that the court order will result in lower import levies on Chinese goods, thereby providing a boost to manufacturing activity.
That was also reflected in Chinese equities after markets reopened following the pause to welcome the lunar Year of the Fire Horse. The major exception was Hong Kong’s tech-dominated Hang Seng, which lost over 2% as the AI fear trade spread eastwards.
US stock futures are pointing to a mild recovery at the open after the major indices all lost over 1% yesterday. The latest domino to fall in response to potential disruption from Artificial Intelligence is IT consulting. Anthropic continues to be the chief antagonist, this time unveiling a tool that promises to plug the knowledge shortage for the legacy programming language COBOL, which still underpins IT infrastructure across sectors as diverse as financial services, airlines and the public sector. It’s still too early to say just how much the likes of Claude Code will displace established providers of coding services, but right now, just the mere mention of a new tool is enough to wipe billions of dollars off the value of Accenture (-6%) and IBM Shares (-13%).
Industrial stocks and US financials also had a tough start to the week with tariff uncertainty hanging thick in the air as America’s trading partners weigh up their responses to Washington’s blanket levies and Donald Trump’s sabre-rattling.
Brent Crude prices have risen to nearly $72 per barrel as diplomatic efforts between Washington and Tehran send mixed signals about the likelihood of military escalation. The temporary closure of the Strait of Hormuz earlier this month has left traders increasingly sensitive to developments in the region. Reported Ukrainian drone strikes on Russian infrastructure have added to the tension. Add in expectations of an oil surplus this year and the ever-shifting trade landscape, and further volatility looks to be the only certainty.”
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