News

A set of tariffs announced by Donald Trump on Canada, Mexico and China is set to take effect tomorrow, but he has shown he can pull back on such announcements at the last minute.

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05:33 PM GMT

Defence companies ‘the trade of the quarter’, says analyst

Investing in European defence companies “is the trade of the quarter for sure”, an analyst has said.

Mabrouk Chetouane, of Natixis Global Asset Management, told Bloomberg that there would be further momentum in defence as part of a European stock market rally.

Meanwhile, Enguerrand Artaz, a fund manager at La Financière de l’Echiquier in Paris, said: “There is currently no reason for the momentum in Europe to stop.

“When you look at the defiance some investors have toward US markets where growth is slowing down and the remaining doubts on China, Europe is a good place to rotate and redeploy capital.”

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05:16 PM GMT

Investors bet on European defence stocks

Investors piled into European defence shares, following the clearest sign yet the region’s leaders were racing to increase defence spending and help to secure peace in Ukraine.

A flurry of European diplomacy, including an agreement to spend more on defence, followed an acrimonious meeting between Volodymyr Zelenskiy and Donald Trump on Friday.

The continent’s defence industry, measured by the Stoxx aerospace and defence index, jumped 8pc today, hitting record highs.

Peter Schaffrik, of RBC Capital Markets, said: “It is an inflection point and Europe realises it needs to do the heavy lifting (on defence and security).

“The German elections have opened the door for more spending. The whole Zelenskiy-Trump meltdown has fast forwarded everything.”

Francois Savary, chief investment officer at Genvil Wealth Management, agreed.

“We are nearing a tipping point if they (European leaders) get their act together. My bet is something is going to come, as the pressure is building.”

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04:53 PM GMT

Rubio thanks UK for encouraging Europe to provide for its defence

US Secretary of State Marco Rubio this afternoon thanked British Foreign Secretary David Lammy for Britain’s role in encouraging Europe to provide for its own defence and push for peace in Ukraine.

The US State Department said that during a call with Mr Lammy on Monday, Mr Rubio confirmed the United States is ready to negotiate to end the Russia-Ukraine conflict and will continue working with the United Kingdom towards peace in Ukraine.

It comes amid a strong day for UK and European stock markets. France’s Cac 40 rose 1.1pc, Germany’s Dax added 2.6pc and the pan-European Stoxx 600 added 1.1pc.

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04:49 PM GMT

Defence boost sends FTSE 100 to record high

Defence companies soared on the stock market today, pushing the FTSE 100 index to a record high.

BAE Systems surged 14pc amid expectations that the UK and Europe would hike spending on defence to bolster the position of Ukraine against the invasion of Russia.

The stock market closed at 8,871.31 after rising 0.7pc.

“Europe is rallying round Ukraine and it’s hard to see defence stocks not enjoying years of orders,” noted Neil Wilson, analyst at TipRanks.

On the continent, French defence group Thales rose 15pc, a day after Sir Keir Starmer announced that Britain would support a £1.6bn missile deal with the company. Meanwhile, German peer Rheinmetall rallied 15pc.

European leaders agreed on Sunday they needed to spend more on defence.

The agreement to increase spending is an effort to show US president Donald Trump that the continent can defend itself, after Ukraine’s Volodymyr Zelenskiy clashed with the US leader and cut short a visit to Washington.

European Commission chief Ursula von der Leyen warned yesterday that “we urgently have to rearm Europe” as leaders from the continent met in London for crisis talks over Ukraine.

“It’s now of utmost importance we increase spending ... it’s important we prepare for the worst,” she added.

In Germany, the two parties hoping to form the next government are planning to plough hundreds of billions of euros into defence and infrastructure when in power, the Bild newspaper reported.

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04:18 PM GMT

Eurozone bond yields surge as markets brace for jump in defence spending

Eurozone government bond yields rose sharply today as investors processed the weekend’s dramatic geopolitical developments, which will likely require greater European borrowing to spend on defence.

The move came after European leaders agreed at a summit in London on Sunday that they must spend more on defence.

The European Commission chief suggested the bloc could ease rules that limit debt levels.

In addition, Reuters reported that the parties in talks to form Germany’s new government are considering quickly setting up two special funds, potentially worth hundreds of billions of euros, one for defence and a second for infrastructure.

Samy Chaar, chief economist at Lombard Odier, said: “After the German elections there is more and more talk about defence spending, and if not infrastructure spending... It does seem like the Europeans think that the status quo and doing nothing is not possible - they can disappoint, but they can’t do nothing.”

Germany’s 10-year bond yield, the eurozone’s benchmark, rose to as high as 2.519pc, from 2.410pc on Friday.

Germany’s 30-year bond yield rose as high as 2.827pc, from 2.701pc on Friday. It is set for its biggest daily rise since last April. Yields rise as prices fall.

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04:04 PM GMT

European stocks hit all-time high on defence boost

Europe’s continent-wide Stoxx 600 index hit an all-time high today on predictions of higher defence spending.

Chris Beauchamp, chief market analyst at online trading platform IG, said: “While hopes of a Ukraine peace plan do continue to play some part in today’s positive market action, it is the expectation of rearmament across Europe that is the most important driver.

“This will mark the most significant reorientation of European economies since the end of the Cold War, and promises to see the infusion of cash into defence and related stocks.

“Bond yields have risen however, a sign that investors remain nervous about the impact on government spending and on inflation.”

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03:58 PM GMT

US defence stocks edge up while Wall Street struggles

US stocks are down this afternoon following the latest discouraging signals on the US economy, but defence stocks have edged up.

The S&P 500 is down around 0.1pc and the technology-heavy Nasdaq is down 0.4pc.

It comes after fresh data on US manufacturing this morning showed that new orders are down. Tomorrow, Donald Trump’s latest milestone on imposing tariffs could see a set of tariffs announced by Trump on Canada, Mexico and China take effect.

The S&P aerospace & defence index is up 0.3pc this afternoon, boosted by firms such as US defence giant Northrop Grumman, up 2pc.

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03:45 PM GMT

Starmer: ‘we will never choose between either side of the Atlantic’

Sir Keir Starmer said the UK must strengthen its relationship with the US but will “never choose between either side of the Atlantic”.

Speaking in the House of Commons, the Prime Minister highlighted his visit to the White House to meet US president Donald Trump to strengthen the relationship between the two countries, adding: “What happened in his subsequent meeting with president Zelensky is something nobody in this House wants to see.

“But I do want to be crystal clear: we must strengthen our relationship with America - for our security, for our technology, for our trade and investment. They are and always will be indispensable.

“And we will never choose between either side of the Atlantic. In fact, if anything the past week has shown that that idea is totally unserious because while some people may enjoy the simplicity of taking a side, this week has shown with total clarity that the US is vital in securing the peace we all want to see in Ukraine.”

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03:41 PM GMT

Germany’s Merz says defence spending hike has ‘urgency’

Friedrich Merz, who is set to be the next German chancellor, said that he wants to strike a deal this week with the country’s Social Democrats to boost defence expenditure.

Bloomberg reported that boosting Germany’s defences had become more urgent following Donald Trump’s clash with Volodymyr Zelenskiy on Friday.

Mr Merz, leader of the Christian Democratic Union, said: “The urgency from my point of view is great. But I can’t tell you either the path or give you any numbers, it’s all open.” He added that the talks have been “very good and constructive.”

The yield on 10-year German government bonds is currently up at 2.495pc, up from 2.410pc on Friday.

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03:33 PM GMT

Oil prices flat despite defence stocks rally

The price of oil was little changed today despite a rally in defence stocks which could fuel a boom in demand.

Brent crude, the international benchmark, was down by 0.2pc to less than $72 a barrel, while US-produced West Texas Intermediate was down 0.4pc towards $69.

Saxo Bank analysts said: “Crude remains stuck near lows amid fears a global trade war may negatively impact demand, at a time when supply is ample and OPEC+ considers when to start tapering production cuts.”

Donald Trump is expected to follow through with plans for tariffs on goods from Canada and Mexico due to come into force tomorrow, along with an additional 10pc levy on Chinese products.

With that, I’ll take the opportunity to thank you for following these market updates so far and hand you over to Alex Singleton .

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03:22 PM GMT

UK borrowing costs rise as markets brace for defence spending spree

The cost of government borrowing is on the rise around the world as bond markets brace for a sharp ramp up in defence spending across Europe.

The yield on 10-year UK gilts - a bond market benchmark for government borrowing costs - rose as high as 4.6pc today as leaders put together plans to support peace in Ukraine.

The 10-year German bund yield - considered a guide for the whole eurozone - rose more than 10 basis points earlier to nearly 2.52pc.

It comes amid reports its likely next government is considering setting up a special fund for defence spending which could amount to hundreds of billions of euros, according to Reuters.

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02:53 PM GMT

Wall Street rises despite impending Trump tariffs

U.S. stock indexes rose in early trading ahead of President Donald Trump’s latest deadline on tariffs.

The S&P 500 was 0.3pc higher, while the Dow Jones Industrial Average was up 0.2pc.

However, the Nasdaq Composite was down 0.2pc as delayed 25pc tariffs on Canada and Mexico were due to come into force on Tuesday, along with an additoinal 10pc tariff on China.

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02:05 PM GMT

Defence stocks surge as Starmer signals ‘crossroads in history’

Defence stocks surged after Sir Keir Starmer said Europe stands at “a crossroads in history” as investors bet that leaders will race to increase arms spending and help to secure peace in Ukraine.

The Prime Minister said he was working on a “coalition of the willing” that would include British troops and fighter jets in Ukraine after a summit in London on Sunday.

After today’s rally in defence stocks, RBC Capital Markets analyst Peter Schaffrik said: “It is an inflection point and Europe realises it needs to do the heavy lifting (on defence and security).

“The German elections have opened the door for more spending. The whole Zelenskiy-Trump meltdown has fast forwarded everything.”

Francois Savary, chief investment officer at Genvil Wealth Management, agreed.

“We are nearing a tipping point if they (European leaders) get their act together,” he said.

“My bet is something is going to come, as the pressure is building.”

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01:48 PM GMT

Saab seals £126m German cruise missile deal

Saab has won a 1.7 billion krona (£126m) order from Germany to modernise and maintain the country’s cruise missiles for ten years until 2035.

The Swedish defence and aviation company said: “The order includes significant system upgrades and modernisation to the German Air Force’s TAURUS missiles as well as a ten-year life cycle maintenance.”

Cruise missiles are hard to detect by air defence radars as they fly at low altitudes.

Saab received the maintenance order from Taurus Systems, which sold the missiles originally to Germany. Taurus is a joint venture of Saab and German missile systems company MBDA Germany.

Shares in Saab were up 12.6pc having earlier jumped as much as 14pc to a record high on Stockholm’s stock exchange.

Other European defence stocks also advanced over expectations the Continent will step up military spending after the weekend summit in London.

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01:23 PM GMT

US defence firms may find out ‘America first’ has its downsides

Donald Trump needs to “think again” if he assumes that when countries up their defence spending they will be acquiring US weapons, according to Telegraph readers.

Here are some of your thoughts from the comments section below on the expected boost in defence spending.

You can join the debate here :

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12:43 PM GMT

European stocks hit record highs in defence rally

The benchmark stock index in France has risen past its record closing high amid a global rally in defence stocks.

The Cac 40 in Paris was up 1.6pc to 8,240.52 as companies like defence group Thales surged by as much as 18.2pc.

Germany’s Dax surged by as much as 2.7pc to a new record high of 23,158.47 as arms manufacturer Rheinmetall climbed as much as 19.1pc.

Neil Wilson, analyst at TipRanks, said: “Europe is rallying round Ukraine and it’s hard to see defence stocks not enjoying years of orders.”

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12:16 PM GMT

German borrowing costs jump over defence push

The cost of government borrowing in Germany has risen at its fastest pace in nearly four months amid reports that its next government is drawing up plans for a major spending push on defence projects.

Germany’s 10-year bund yield - a bond market benchmark for eurozone government borrowing - jumped 10 basis points to tip over 2.5pc.

The rise in yields comes as the parties in talks to form Germany’s new government are considering quickly setting up two special funds potentially worth hundreds of billions of euros, one for defence and a second for infrastructure, according to Reuters.

Such plans would likely have to be fuelled by more government borrowing.

As a result, traders have reduced bets on the amount of interest rate cuts they expect the European Central Bank will be able to make this year.

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11:54 AM GMT

Wall Street poised to rise amid rate cut hopes

US stock indexes are on track to rise at the opening bell amid growing bets that the Federal Reserve will cut interest rates.

Wall Street’s three main indexes logged a monthly decline in February, with the Nasdaq coming close to a 10pc drop from its all-time high.

It came as Donald Trump ramped up his rhetoric on tariffs, with new levies on Canada and Mexico due to come into force tomorrow, as well as an additional 10pc levy on China.

However, recent reports indicating weakening consumer demand have spurred fears of a slowdown in the world’s largest economy, which has prompted traders to increase bets on the Fed cutting interest rates at least twice this year. This is usually seen as positive for stocks.

In premarket trading, the Dow Jones Industrial Average was up 0.2pc, the S&P 500 was up 0.4pc and the Nasdaq 100 gained 0.5pc.

US defence stocks such as RTX added 2.1pc, while Lockheed Martin climbed 1.1pc after the US approved a $3bn (£2.4bn) arms deal to Israel.

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11:34 AM GMT

Pound rises as Europe gears up for defence spending

The pound has risen against the dollar after European leaders agreed on Sunday to draw up a Ukraine peace plan to present to the United States.

Sterling rose 0.6pc against the dollar to $1.265 amid expectations that increased defence spending could boost economic growth.

Sir Keir Starmer announced a £1.6bn deal for a Belfast factory to supply 5,000 air-defence missiles to Ukraine.

During February, sterling recorded its first monthly rise against the dollar since September, driven by the prospect of UK interest rates taking longer to fall than those elsewhere.

However, the pound was down 0.1pc against the euro at €1.211, following the latest inflation figures for the single currency area.

The euro was up 0.7pc versus the dollar at $1.045 as official figures showed inflation fell less than expected last month, raising doubts about how far the European Central Bank will be able to cut interest rates after its next meeting on Thursday.

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11:14 AM GMT

Government borrowing costs jump as defence spending expected to rise

The costs of government borrowing is rising around the world amid expectations that Europe will ratchet up defence spending following the Ukraine summit held in London at the weekend.

The yield on 10-year UK gilts - a bond market benchmark for government borrowing costs - rose about four basis points to 4.57pc.

The 10-year German bund yield - considered a guide for the whole eurozone - rose nearly eight basis points to 2.48pc as Britain and France push for a ‘Europe Plus’ coalition to protect Ukraine in the event of a peace deal.

Meanwhile, Germany’s likely next government is considering setting up a special fund for defence spending which could amount to hundreds of billions of euros, according to Reuters.

Jens Peter Sorenson, chief analyst at Danske Bank, said: “Defense spending looks like it will be both on a national level and on an EU level - but there is no doubt that defence spending will increase significantly.”

He warned this would likely lead to governments issuing more debt on the bond markets, which would require a higher “risk premium” to attract investors, pushing up borrowing costs.

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11:00 AM GMT

The idea that we cannot afford to increase defence spending is a sick joke

Umpteen politicians and commentators have recently been falling over themselves to join those of us who have been making the case for ages for spending more money on defence, writes Roger Bootle .

But how could this extra spending be financed?

The need to increase defence spending has been entirely predictable.

It was evident since at least 2014, when Russia seized Crimea , that Vladimir Putin was going to be a menace to the established order.

Moreover, it was surely plain that America would not continue to fork out huge sums of money ad infinitum for the defence of Europe while many rich European countries chose to spend very little.

And it has surely been obvious for some time that the threats to our security from Asia were intensifying. Yet where is our “Iron Dome” missile shield?

What makes our recent defence posture so pathetic is that the defence of the realm is the prime function of government.

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10:42 AM GMT

Eurozone inflation falls less than expected

The expected surge in defence spending comes as official figures today show inflation in Europe eased to an annual 2.4pc in February.

Although it supports the case for another interest rate cut from the European Central Bank, the drop was not as steep as economists had hoped for.

Analysts had forecast a drop to 2.3pc from January’s 2.5pc.

It comes as the European Central Bank is expected to reduce interest rates at its next meeting on Thursday from 2.75pc to 2.5pc.

Policymakers are trying to help revive growth in the eurozone amid concerns that new tariffs from Donald Trump could impact the economy, which is already showing signs of stagnation.

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10:17 AM GMT

UK defence giant makes record surge as Starmer prepares to rearm

BAE Systems has made its biggest single-day jump on record as the defence sector received a boost following the Ukraine summit hosted by Sir Keir Starmer over the weekend.

Shares in the weapons and fighter jet manufacturer jumped as much as 18.5pc to hit a record high, helping the wider FTSE 100 to also reach a new all-time peak, up as much as 0.5pc to 8,852.71.

Engine maker Rolls-Royce followed closely behind BAE on the blue-chip index, with a 6.6pc rise amid the rally in the defence sector.

Other stocks linked to the defence sector were enjoying sharp gains on Monday, with defence technology group QinetiQ up as much as 10.5pc to lead the FTSE 250, with Babcock International up as much as 9.8pc and Chemring rising as much as 8.6pc.

Among small cap stocks, there were big share increases for helmet and gas mask maker Avon Technologies - up as much as 8.5pc - while Cohort, which is a specialist in sonar, torpedo and communications, surging as much as 12pc.

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09:52 AM GMT

Thales surges after Starmer announces Ukraine missile deal

Shares in French defence manufacturer Thales surged after Sir Keir Starmer announced a £1.6bn deal at the weekend for its Belfast factory to supply missiles to Ukraine.

Thales jumped as much as 18.2pc in Paris after the Prime Minister set out the deal which will create 200 new jobs and support another 700 roles in Northern Ireland.

The factory will make more than 5,000 lightweight-multirole missiles to be sent to Ukraine as part of the largest contract ever received by Thales in Belfast.

Sir Keir Starmer: “My support for Ukraine is unwavering. I am determined to find a way forward that brings an end to Russia’s illegal war and guarantees Ukraine a lasting peace based on sovereignty and security.

“I am also clear that national security is economic security. As well as levelling up Ukraine’s air defence, this loan will make working people here in the UK better off, boosting our economy and supporting jobs in Northern Ireland and beyond.”

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09:38 AM GMT

British factory output lowest in more than a year

The expected surge in defence spending comes at a useful time for manufacturers, which grappled with a slump in output last month.

The S&P Global UK Manufacturing PMI showed activity in the sector plunged to a 14-month low in February, although the reading of 46.9 was slightly better than initial estimates of 46.4.

Output has contracted for four straight months as companies cut jobs at the fastest pace since May 2020, which was blamed on the impending rise in employer National Insurance contributions (Nics) and the rising minimum wage.

Rob Dobson, director at S&P Global, said: “February PMI data show UK manufacturers facing an increasingly difficult trading environment.

“Weak demand, low client confidence and rising cost pressures are accelerating the downturns in output and new orders, while the Autumn Budget’s changes to the national minimum wage and employer Nics are driving up inflation fears and intensifying the downward trend in staff headcounts.

“The pace of manufacturing job losses is currently running at a rate not seen since the pandemic months of mid-2020.”

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09:15 AM GMT

Where to invest as Europe ramps up defence spending

When football club Borussia Dortmund announced that Rheinmetall, a German weapons manufacturer, would become their stadium sponsor in May 2024, the move was widely condemned by the football world, writes Josh Kirby .

Fans of the club have made their displeasure with the action known, frequently protesting with banners, chants and members’ votes.

But when the world changes quickly, so too do reputational impediments. In the right conditions, those who have made their fortunes selling tanks and guns can reposition themselves as peace merchants.

Read how stockpickers should turn their attention to companies set to benefit from the new stance on defence.

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09:00 AM GMT

Defence shares are ‘trade of the quarter’

European defence companies had already been rising before the latest surge.

German arms manufacturer Rheinmetall jumped as much as 16.5pc today as European leaders sought to build a “coalition of the willing” to keep the peace in Ukraine if a truce can be agreed with Russia. It has risen 70pc so far this year.

BAE Systems had already gained 22pc so far this year while Dassault Aviation had climbed more than 24pc.

Mabrouk Chetouane of Natixis Global said: “This is the trade of the quarter for sure.”

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08:37 AM GMT

European shares rise amid push for Ukraine peace deal

BAE Systems was up as much as 18.5pc amid expectations for higher spending on defence from European nations in a push for peace in Ukraine.

Susannah Streeter of Hargreaves Lansdown said:

The shocking clash between Trump, Vance and Zelensky has brought the need for Europe to increase collective security into sharp focus.

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08:17 AM GMT

Defence stocks surge as Europe prepares to ramp up spending

Defence stocks surged in early trading as Europe prepares to ramp up spending on its armed forces in a bid to secure peace in Ukraine.

BAE Systems on the FTSE 100 and Dassault Aviation on the Euronext in Paris both surged by 13pc after Sir Keir Starmer chaired a European summit in London over the weekend.

Emmanuel Macron said France and Britain are to propose a one-month truce in Ukraine “in the air, at sea”.

The French president told Le Figaro that European soldiers would only be deployed on the ground in the second phase of a potential peace deal.

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08:06 AM GMT

UK markets rise after European peace talks

The FTSE 100 rose at the start of trading amid hopes that a European peace effort in Ukraine will boost spending.

The blue-chip index gained 0.1pc to 8,820.69 while the midcap FTSE 250 gained 0.4pc to 20,401.10.

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07:58 AM GMT

Eurozone borrowing costs rise amid prospect of higher defence spending

Government borrowing costs edged higher in early trading after the European peace talks in Ukraine raised the prospect of higher defence spending.

On the bond markets, Germany’s 10-year bund yield, the eurozone benchmark, rose four basis points in early trading to 2.43pc.

Sir Keir Starmer chaired European peace talks in London on Sunday after the row between Donald Trump and Volodymyr Zelensky raised doubts about the possibility of peace in Ukraine.

The move higher in bond yields was partly a rebound from Friday’s more than two-week low of 2.37pc, but also came after European leaders agreed at a Sunday summit in London that they must spend more on defence.

The European Commission chief  Ursula von der Leyen suggested the bloc could ease rules that limit debt levels in a move which would likely make bond investors uneasy.

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07:47 AM GMT

Gas prices jump after Trump-Zelensky row

Wholesale gas prices spiked at the start of trading this week after the row between Donald Trump and Volodymyr Zelensky in the White House raised questions about peace in Ukraine.

Europe’s benchmark gas contract rose as much as 6.7pc after the meltdown in the Oval Office between the two leaders and US vice president JD Vance on Friday.

The rise in so-called Dutch front-month futures comes after its biggest monthly loss in a year in February amid hopes for peace in Ukraine.

ING strategists Warren Patterson and Ewa Manthey said: “It’s unclear where the US now stands, making a peace deal seems more distant than a week ago.”

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07:39 AM GMT

No one-month truce plan made, says Britain’s armed forces minister

A UK minister said he does not recognise claims a one-month truce plan for Ukraine has been agreed by France and Britain after Emmanuel Macron was reported to have said such a plan had been proposed by the two countries.

Asked about the report in French newspaper Le Figaro, armed forces minister Luke Pollard told Times Radio: “No agreement has been made on what a truce looks like, and so I don’t recognise the precise part you mentioned there.

“But we are working together with France and our European allies to look at what is the path to how... we create a lasting and durable peace in Ukraine.”

Pressed again on whether the UK and France had presented the summit on Sunday with a plan for a month-long ceasefire, he said: “You wouldn’t expect me to get into the details of what that plan looks like, because at the moment, the only person that would benefit from those details being put in the public domain before any plan is agreed would be President Putin.”

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07:36 AM GMT

Pound rises on hopes of Ukraine truce

The pound and the euro climbed as Sir Keir Starmer and Emmanuel Macron proposed a month-long truce in Ukraine, according to the French president.

Sterling was up 0.1pc against the dollar to just under $1.26 while the single currency climbed 0.3pc against the dollar to $1.04.

It comes after Emmanuel Macron said France and Britain are to propose a one-month truce in Ukraine “in the air, at sea”.

European soldiers would only be deployed on the ground in the second phase of a potential peace deal, the French president told Le Figaro.

It comes after a summit of European leaders in London on Sunday following the meltdown in the Oval Office between Donald Trump, vice president JD Vance and Ukrainian president Volodymyr Zelensky.

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07:29 AM GMT

Good morning

Thanks for joining me. The pound and the euro rose in early trading amid renewed hopes for peace talks over Ukraine.

France and Britain are to propose a one-month truce in Ukraine “in the air, at sea”, Emmanuel Macron has said following talks in London on Sunday.

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What happened overnight

Asian shares wavered despite upbeat Chinese factory data as sharply higher tariffs on US imports of Chinese goods looked set to take effect on Tuesday.

In Hong Kong, Chinese bubble tea chain Mixue Bingcheng’s shares soared 43pc after its $444m (£352m) IPO. Local reports said it set a local record for subscriptions, which exceeded 1 trillion Hong Kong dollars (£102bn). The company claims to be the world’s largest food retail chain, with more than 45,000 outlets.

But after a strong start, Hong Kong’s Hang Seng shed 0.2pc to 22,898.55, while the Shanghai Composite index slipped 0.3pc to 3,310.52.

In Tokyo, the Nikkei 225 advanced 1.7pc to 37,785.47.

South Korean markets were closed for a holiday, while the S&P/ASX 200 in Australia gained 0.9pc to 8,245.70.

Taiwan’s Taiex sank 1.3pc, while in Bangkok, the SET fell 0.8pc.

Surveys of Chinese factory managers showed signs of improvement in February as new orders rose, likely driven by companies moving quickly to beat rising tariffs on exports to the United States, where the administration of President Donald Trump has boosted import duties on Chinese goods to 20pc, effective Tuesday.

A report by the Communist Party newspaper Global Times said China was considering retaliatory moves, including higher tariffs on US exports of food and other agricultural goods.

On Friday, the S&P 500 jumped 1.6pc and the Dow Jones Industrial Average gained 1.4pc. The Nasdaq composite jumped 1.6pc to 18,847.28.

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