London stocks had extended gains by midday on Tuesday, with financials pacing the gains as investors took Trump's latest tariff threats in their stride, ahead of a policy announcement from the Federal Reserve and a raft of US tech earnings later in the week.
The FTSE 100 was up 0.6% at 10,206.31.

Investors were mulling the latest tariff threats from US President Donald Trump, who 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?," the US president 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%."

Dan Coatsworth, head of markets at AJ Bell, said: "The FTSE 100 moved higher after gains in the US last night and across much of Asia.

"The exception to the positivity in Asian markets was South Korea after the Trump administration announced it was raising tariffs on imports from the country to 25% after accusing Seoul of not living up to a deal agreed last year.

"The potential threat of 100% tariffs on Canada if it strikes a trade deal with China also lingers in the air, after the possibility of import taxes on European goods was floated in the spat over Greenland.

"It appears a period of relative stability over US trade policy is threatening to come to an end which could have consequences for global markets.

"Gold prices remain elevated, even if they have eased a bit below their recent record highs, as investors await the Federal Reserve's latest meeting and earnings reports from most of the big tech contingent."

Looking ahead, investors were eyeing results from 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.

On home shores, 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%.

Prices rose across the board. Non-food inflation edged up 0.3%, in comparison to the previous month's 0.6% decline, while food inflation rose to 3.9% from 3.3%. Within that, fresh food inflation rose to 4.4% from 3.8%, while ambient food prices increased by 3.1%, compared to a 2.5% uplift in December.

Helen Dickinson, chief executive of the British Retail Consortium, blamed the uplift on higher costs, including energy prices and National Insurance contributions, filtering down to prices.

She continued: "Meat, fish and fruit were particularly affected, also reflecting weak supply and stronger demand.

"It's a challenging time for households. Retailers do what they can to keep prices down in a competitive market, but thin margins and rising costs of government policy make it harder.

"Government must double down on costs in order to support households."

In equity markets, banks were the standout performers, with HSBC, NatWest, Barclays and Lloyds 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".

Asia-focused insurer Prudential was also a high riser, along with wealth manager St James's Place.

Burberry was in fashion after an upgrade to 'overweight' from 'equalweight' at Barclays, which lifted its price target on the stock to 1,450p from 1,340p as it said the turnaround strategy was paying off.

Food producer Cranswick rose after it lifted its full-year profit outlook, hailing strong revenue growth in the third quarter.

On the downside, iconic bootmaker Dr Martens tumbled as it said it expected full-year revenue to be broadly flat as third-quarter sales fell 3.1% year-on-year, with growth in the Americas offset by a challenging market in Europe.

AJ Bell's Coatsworth said: "For much of Dr Martens' time as a public company it has felt like the company had its shoelaces tied together and third-quarter numbers look like another trip up.

"The strategy of prioritising full-price sales rather than heavy discounting - which resulted in a drop in revenue for the period - could ultimately be a case of one step back, two steps forward.

"Protecting the integrity of the brand rather than flogging its footwear on the cheap is a sensible long-term approach.

"However, Dr Martens has little credit in the bank with investors who, even in the context of the company's strategy of putting price above volume, may be alarmed by the scale of the drop in European sales. The consumer backdrop may be tough but that alone is not enough to earn Dr Martens a free pass."

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

Market Movers

FTSE 100 (UKX) 10,206.31 0.57%
FTSE 250 (MCX) 23,352.15 0.00%
techMARK (TASX) 5,943.26 0.28%

FTSE 100 - Risers

HSBC Holdings (HSBA) 1,280.00p 3.04%
NATWEST GROUP (NWG) 664.00p 2.09%
Prudential (PRU) 1,188.50p 1.93%
Kingfisher (KGF) 329.40p 1.79%
Barclays (BARC) 487.80p 1.47%
Lloyds Banking Group (LLOY) 104.50p 1.46%
Burberry Group (BRBY) 1,190.50p 1.45%
St James's Place (STJ) 1,480.50p 1.44%
Standard Chartered (STAN) 1,856.00p 1.23%
Spirax Group (SPX) 7,295.00p 1.11%

FTSE 100 - Fallers

Fresnillo (FRES) 4,318.00p -2.92%
Experian (EXPN) 2,880.00p -1.77%
Antofagasta (ANTO) 3,718.00p -1.51%
Convatec Group (CTEC) 233.00p -1.44%
Diageo (DGE) 1,631.50p -1.42%
Entain (ENT) 660.40p -1.11%
Anglo American (AAL) 3,413.00p -1.02%
British Land Company (BLND) 407.80p -0.92%
Sainsbury (J) (SBRY) 313.80p -0.88%
Beazley (BEZ) 1,131.00p -0.79%

FTSE 250 - Risers

Playtech (PTEC) 288.50p 5.68%
RHI Magnesita N.V. (DI) (RHIM) 2,875.00p 2.68%
C&C Group (CDI) (CCR) 109.40p 2.63%
Lion Finance Group (BGEO) 9,970.00p 2.10%
Genus (GNS) 2,955.00p 2.07%
BioPharma Credit (BPCR) 0.93p 1.98%
Fidelity Emerging Markets Limited Ptg NPV (FEML) 1,192.00p 1.88%
Pantheon Infrastructure (PINT) 113.00p 1.80%
PPHE Hotel Group Ltd (PPH) 1,848.00p 1.54%
Pacific Horizon Inv Trust (PHI) 880.00p 1.50%

FTSE 250 - Fallers

Dr. Martens (DOCS) 65.70p -13.15%
Hochschild Mining (HOC) 723.00p -3.66%
Energean (ENOG) 876.00p -3.26%
SSP Group (SSPG) 184.60p -2.59%
Computacenter (CCC) 3,276.00p -2.50%
Pets at Home Group (PETS) 198.60p -2.46%
Greggs (GRG) 1,627.00p -2.28%
Ceres Power Holdings (CWR) 324.20p -2.11%
Avon Technologies (AVON) 1,880.00p -1.98%
Pan African Resources (PAF) 142.20p -1.93%