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Stock prices in London, Paris and Frankfurt continued to trade lower at Tuesday midday, as European leaders prepared to meet US President Donald Trump in Davos amid ongoing tensions over Greenland. The FTSE 100 index was down 107.25 points, 1.1%, at 10,088.10. The FTSE 250 was down 244.86 points, 1.1%, at 22,866.95, and the AIM All-Share was down 4.91 points, 0.6%, at 798.58. The Cboe UK 100 was down 1.1% at 1,008.47, the Cboe UK 250 was 1.1% lower at 20,036.11, and the Cboe Small Companies fell 0.5% at 17,709.84. In European equities on Tuesday, the CAC 40 in Paris sank 1.4%, while the DAX 40 in Frankfurt was 1.6% lower. Sterling was at $1.3466 at midday on Tuesday, up from $1.3428 at the London equities close on Monday. The euro was higher at $1.1737 from $1.1643. Against the yen, the dollar was lower at JP¥157.75 versus JP¥158.11. US Treasury Secretary Scott Bessent rejected the idea that European governments could aggressively sell American debt to counter Washington’s threats over Greenland, saying such a move would ‘defy logic’. President Donald Trump said at the weekend that, from February 1, Britain, Denmark, Finland, France, Germany, the Netherlands, Norway and Sweden would be subject to a 10% tariff on all goods sent to the US until Denmark agrees to cede Greenland. The announcement has drawn angry charges from the US allies who are pondering countermeasures, AFP reported. These could include retaliatory tariffs but also possibly a concerted strategy to offload US Treasury bonds. About a third of traded American government bonds, estimated at a total of some $30 trillion, is held by foreigners, led by Japan. Other major holders of US sovereign bonds include the UK, Belgium, Canada and France. Aggressive selling of bonds would cause long-term interest rates to spike, make the re-financing of the US debt hugely more expensive for Trump’s administration and weigh heavily on corporate financing and the economy as a whole. The yield on the US 10-year Treasury was quoted at 4.30%, widening from 4.21% at the close on Friday. The yield on the US 30-year Treasury was quoted at 4.94%, stretched from 4.82%. But asked by reporters at the Davos World Economic Forum whether the US was preparing for such a scenario, Bessent said that it ‘defies any logic’. Calling the US Treasury market ‘the best-performing market in the world’ and the ‘most liquid’ debt market, he said he expected Europeans to hold on to their exposure, not offload it. ‘There’s a completely false narrative there,’ he said. ‘I think everyone needs to take a deep breath. Do not listen to the media who are hysterical.’ EU leaders will hold an emergency summit in Brussels on Thursday to discuss their response to the Greenland crisis, and Trump said he had agreed to a meeting with ‘various parties’ on the standoff while he is in Davos this week. European Commission President Ursula von der Leyen vowed an ‘unflinching’ response. In a speech to the World Economic Forum at Davos, von der Leyen warned that Trump risked plunging US ties with the EU into a ‘downward spiral’ over the autonomous Danish territory. Against the backdrop of the selloff, gold was higher at $4,732.20 an ounce at midday on Tuesday from $4,671.76 late Monday. Earlier on Tuesday, the yellow metal hit another new record of $4,737.35. Meanwhile, silver was trading at $95.34 after earlier hitting a record of $95.55. ‘Despite a difficult start to the week it feels like the market is still in wait-and-see mode over whether there will be a full-blown trade war between the US and Europe,’ said AJ Bell analyst Russ Mould. ‘On the market Richter scale this is little more than a mild tremor for now. However, the stakes feel high as world leaders, including Donald Trump, prepare to meet at the World Economic Forum in Davos.’ ‘Investors will be hoping for some sort of de-escalation deal on Greenland which removes the risk of a break-up or at least serious rupture in the Nato alliance. If the crisis deepens it is unlikely to spell good news for global equities,’ Mould added. There were broad-based losses on the FTSE 100 on Tuesday. Mondi fell the furthest, down 3.5%. Among other firms to fall were AstraZeneca, which lost 2.9%, St James’s Place, which fell 2.6%, and JD Sports Fashion, which dropped 2.5%. US financial markets were closed on Monday for Martin Luther King Jr Day. They will reopen later on Tuesday, for the first time since the latest US tariff dispute started to unfold. Stocks in New York were called sharply lower. The Dow Jones Industrial Average was called down 1.4%, the S&P 500 index 1.6% lower, and the Nasdaq Composite down 2.0%. In London, Seven Trent climbed 0.8% after Citigroup raised its rating on the water utilty to ’buy’ from ’neutral’. The bank increased its target price on the stock to 3,211 pence from 2,849p. On the FTSE 250 index, Qinetiq climbed 0.9% as it reiterated its full-year guidance despite ‘challenging’ trading in core markets, but the defence technology firm said it remains ‘well positioned’, backed by a strong order book. Farnborough, Hampshire-based Qinetiq said it continues to expect 3% organic revenue growth, an operating margin of 11%, cash conversion of 90%, and earnings per share growth of 15% to 20% in financial 2026, which ends on March 31. In financial 2025, Qinetiq reported revenue of £1.93 billion, an operating margin of 9.6%, cash conversion of 105%, and underlying EPS of 26.1 pence. ‘Whilst the near-term trading environment in our core markets remains challenging and we have revenue to secure in the last quarter, we have achieved positive momentum on order intake. Our book-to-bill is now greater than 1x, and we remain confident in maintaining this ratio for the full year,’ the company said in a trading statement. Among small-caps, shares in Funding Circle jumped 14%. The London-based lending platform said it has outperformed expectations for 2025 with revenue of around £204 million, up 28% on-year, with pretax profit around £20 million, compared to £3 million a year ago. This is ahead of current market expectations of £191 million and £17 million respectively. It said outperformance was driven by continued strong demand despite macroeconomic conditions and ‘product innovation opening up new customer segments and use cases’. The firm said its current guidance for 2026 is for revenue of more than £200 million. Having achieved this a year early, it said it will provide updated guidance alongside its results presentation on March 5. ‘I’m delighted with our strong performance this year. We supported more small businesses than ever before, saw record customer engagement, grew [pretax profit] significantly and achieved our medium-term revenue target of more than £200 million a year ahead of schedule,’ said Chief Executive Officer Lisa Jacobs. Brent oil was trading marginally higher at $64.14 a barrel at midday on Tuesday from $64.13. Copyright 2026 Alliance News Ltd. All Rights Reserved.
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