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The UK was an outlier on European markets on Tuesday with the FTSE 100 dipping slightly.
Whereas the rest of the main European equity indices pushed ahead, the FTSE 100 was held back by shares in British American Tobacco going up in smoke, and Tesco falling on disappointing grocery industry data.
Nvidia
Nvidia chief executive Jensen Huang has repeatedly pushed for his tech company to be allowed to sell more advanced chips to China, and that persistence looks to have paid off.
The Trump administration has given the green light for Nvidia to sell its H200 processors to China. The US government will collect a fee on such sales, imposed as a 25% import tax from Taiwan where the chips are made.
While Nvidia still won’t be able to sell its top-tier products to China, the rule changes do provide a greater opportunity to service the Asian superpower. There is a suggestion that demand could be big as Nvidia’s H200 chips could help the country to play catch up with AI computing power.
It’s another example of a U-turn by the US government, and a slightly odd move given it had continuously cited security concerns as a key reason why more advanced US technology was not to be sold to China.
It remains to be seen whether the decision was a commercial one or a strategic bargaining chip. On one hand, it could bring in more tax revenue for the US government at a time when the national debt is sky high. On the other hand, Trump might view it as a sweetener to keep China happy, and to then strike new trade deals that benefit the US.
Investors bid up shares in Nvidia after the news broke, implying that they see scope for even higher earnings in the future. The prospect of selling more to China has clearly fired up animal spirits in the investment community.
Big tech continues to face intense scrutiny from the regulators, with Google the latest name to be on the receiving end of an antitrust probe. While it is no stranger to dealing with such issues, it’s another headache to deal with.
The European Commission is looking at whether Google has breached EU competition rules with how it has used content from web publishers and YouTube for AI purposes.
The probe will look at whether Google has treated publishers fairly, whether it has granted itself privileged access to content, and whether it has been training its own AI models without compensating content creators or giving them the chance to refuse access.
This situation plays to the wider debate around how content creators can either work with AI or protect their output from being eaten by the machine.
It’s new territory and could take time for the regulators to properly understand the lay of the land, and to establish best practices going forward.
British American Tobacco
The tobacco and vaping industry might look as if it is a ticket to easy money as customers get addicted to its products. However, British American Tobacco has shown that performance isn’t always a smooth ride.
Shares in the tobacco group fell on a gloomy outlook statement, with 2026 performance expected to be at the lower end of targets.
Competition is fierce in the US vape market, not helped by the sector being flooded by products from China. The US is cracking down on illegal products but it’s an uphill battle to eradicate them completely.
Supermarkets
Dan Coatsworth, Head of Markets at AJ Bell, comments:
New figures from Worldpanel show that Sainsbury’s, Marks & Spencer, Ocado and Lidl all grew faster than Tesco in the 12 weeks to 30 November.
It feels like the battle for the Christmas pound starts earlier each year, and the grocers are pulling out all the stops to ensure they’re the ones catering for festivities.
Tesco is the market leader by some distance, which puts it in a strong position to demand best deals from suppliers.
However, the other grocers have been doing their very best to nibble at the edges and try and increase their market share.
Worldpanel’s latest data means the pressure is now on Tesco to protect its position and ensure rivals don’t steal a march in the final few weeks ahead of Christmas.
Russ Mould: Investment Director
Russ Mould is AJ Bell's Investment Director. He has a Master's degree in Modern History from the University of Oxford and more than 30 years' experience of the capital markets.
He started out at Scottish...
