London stocks ended up on Tuesday, with banks pacing the advance as investors took Trump's latest tariff threats in their stride and looked ahead to a policy announcement from the Federal Reserve and a raft of US tech earnings.
The FTSE 100 closed up 0.6% at 10,207.80.

The US President said on Truth Social that he would lift tariffs on South Korean imports to 25% as he accused the country of not "not living up" to a trade deal agreed last year.

"South Korea's Legislature is not living up to its Deal with the United States. President Lee and I reached a Great Deal for both Countries on July 30, 2025, and we reaffirmed these terms while I was in Korea on October 29, 2025. Why hasn't the Korean Legislature approved it?," Trump wrote in a post.

"Because the Korean Legislature hasn't enacted our Historic Trade Agreement, which is their prerogative, I am hereby increasing South Korean TARIFFS on Autos, Lumber, Pharma, and all other Reciprocal TARIFFS, from 15% to 25%."

Derren Nathan, head of equity research at Hargreaves Lansdown, said "Washington's climb down on tariffs to European trade partners has added to investor scepticism over the President's resolve to push through higher import taxes".

"With a delegation on its way from Seoul to Washington, markets are viewing this latest twist as more carrot than stick."

Looking ahead, investors were eyeing results from the three of the 'Magnificent Seven' on Wednesday, with Meta, Tesla and Microsoft's earnings due, along with the first policy announcement of the year from the Federal Reserve.

Nathan said: "Markets aren't expecting any changes to lending rates, but markets will be watching keenly to see if Chair Powell, who's kept a tight grip on monetary policy, is to be replaced by a Trump dove before the end of his term on May 15."

On home shores, the Treasury unveiled a three-year support package for pubs and live music venues worth more than £80m a year following a backlash over rising business rates.

From April, pubs will get a 15% cut to new business rates bills, followed by a two-year real-terms freeze, as well as a review into the method used to value them for business rates.

The government said the package will save the average pub an additional £1,650 in 2026/27. Around 75% of pubs will see their bills fall or stay flat over the same year, with the pub sector as a whole paying 8% less in business rates in 2029 than they do currently.

Elsewhere the latest BRC-NIQ shop price monitor showed that shop price inflation spiked in January, confounding expectations for no change. Shop price inflation was 1.5%, up from 0.7% in December. Consensus had been for inflation to remain at 0.7%.

In equity markets, banks were among the standout performers, with NatWest, HSBC and Barclays all higher.

Richard Hunter, head of markets at Interactive Investor, said banks "attracted some buying interest ahead of what will be an unusually elongated reporting season, beginning with Lloyds on Thursday and not ending until HSBC on 25 February".

The gains also came as Citi said in a research note that it was "particularly constructive" on the medium-term earnings outlook for NatWest and HSBC.

Defence firms Babcock and BAE Systems also racked up strong gains, while food producer Cranswick rose after it lifted its full-year profit outlook, hailing strong revenue growth in the third quarter.

On the downside, precious metals miner Fresnillo suffered the heaviest losses on the FTSE 100, having surged on Monday after the gold price breached $5,000 an ounce for the first time. Gold miners Endeavour and Hochschild also fell.

The Sage Group reversed earlier gains to trade sharply lower as it reiterated full-year guidance on the back of a strong first quarter.

Iconic bootmaker Dr Martens tumbled as it forecast flat full-year revenue after a fall in third-quarter sales, as it faces continuing challenges in the UK and US with cost-conscious consumers reluctant to pay full price for its footwear.

Market Movers

FTSE 100 (UKX) 10,207.80 0.58%
FTSE 250 (MCX) 23,351.66 0.00%
techMARK (TASX) 5,945.58 0.32%

FTSE 100 - Risers

Metlen Energy & Metals (MTLN) 44.45p 3.49%
HSBC Holdings (HSBA) 1,277.20p 2.82%
Babcock International Group (BAB) 1,494.00p 2.75%
NATWEST GROUP (NWG) 667.60p 2.64%
St James's Place (STJ) 1,497.50p 2.60%
Kingfisher (KGF) 331.60p 2.47%
Spirax Group (SPX) 7,390.00p 2.43%
BT Group (BT.A) 187.10p 2.35%
Lloyds Banking Group (LLOY) 105.25p 2.18%
BAE Systems (BA.) 2,012.00p 1.98%

FTSE 100 - Fallers

Fresnillo (FRES) 4,140.00p -6.92%
Relx plc (REL) 2,720.00p -5.13%
The Sage Group (SGE) 989.60p -5.12%
Experian (EXPN) 2,785.00p -5.01%
London Stock Exchange Group (LSEG) 8,258.00p -3.73%
Entain (ENT) 645.20p -3.38%
Diageo (DGE) 1,609.50p -2.75%
Flutter Entertainment (DI) (FLTR) 12,405.00p -2.48%
Pearson (PSON) 939.80p -2.43%
Smurfit Westrock (DI) (SWR) 3,143.00p -2.12%

FTSE 250 - Risers

Playtech (PTEC) 299.50p 9.71%
W.A.G Payment Solutions (EWG) 130.00p 4.84%
IP Group (IPO) 59.30p 3.66%
C&C Group (CDI) (CCR) 110.40p 3.56%
TBC Bank Group (TBCG) 4,285.00p 2.76%
Drax Group (DRX) 918.00p 2.74%
Cranswick (CWK) 5,290.00p 2.72%
Vistry Group (VTY) 666.60p 2.71%
Genus (GNS) 2,970.00p 2.59%
Lion Finance Group (BGEO) 10,000.00p 2.41%

FTSE 250 - Fallers

Dr. Martens (DOCS) 66.90p -11.57%
Pan African Resources (PAF) 137.80p -4.97%
Endeavour Mining (EDV) 4,344.00p -4.36%
Baltic Classifieds Group (BCG) 202.50p -3.57%
Kainos Group (KNOS) 919.50p -3.41%
WPP (WPP) 310.20p -3.39%
Ceres Power Holdings (CWR) 320.00p -3.38%
Energean (ENOG) 876.50p -3.20%
Hochschild Mining (HOC) 728.50p -2.93%
SSP Group (SSPG) 184.60p -2.59%