FTSE 100 close: Rolls Royce leads rebound as US markets bounce back ahead of new tariffs
European and US markets welcomed calmer waters on Tuesday after swimming in a sea of red on Monday.
The FTSE 100 sharply rose in early trading before consolidating gains. The index closed up 0.6 per cent, led by Rolls Royce, which surged over four per cent and over 2.5 per cent rise in insurance provider Hiscox.
The S&P 500, Dow Jones and the Nasdaq jumped in early trading as markets brushed off yesterdays woes.
“Investors are keeping their fingers crossed that Donald Trump’s ‘Liberation Day’ is not as punishing as first feared,” Russ Mould, investment director at AJ Bell, said.
He added that Monday’s sell-off indicated investors were concerned Trump was going to be more aggressive with tariffs.
“Markets often over-react in the face of potential bad news, with investors pressing the sell button first and thinking later,” Mould said.
The FTSE 250 closed up 0.6 per cent, making back some ground after losing nearly two per cent yesterday.
Across Europe, markets had managed to turn the tide on Monday’s woes with Germany’s Dax and Cac 40 in Paris each climbing of over one per cent.
FTSE 100 outperforms New York in first quarter
Whilst markets started the second quarter on a positive note, the first three months of the year presented a mixed picture.
The FTSE gained five per cent in the first quarter, whilst the S&P slumped by over four per cent. The tech-heavy Nasdaq fell over ten per cent.
Mould said: “While some investors may be tempted to dismiss them as a typical April 1 prank, the statistics for the world’s major stock market indices clearly show that the UK is doing better than the USA in the year to date and that America is actually one of the world’s poorest performers worldwide.”
Analysts at Hargreaves Lansdown noted the FTSE 100’s performance in “miserable March,” adding it was “outshining US markets”.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said investors had turned to the UK’s “relatively undervalued stocks for their defensive appeal in these choppy times”.
However, Mould cautioned: “Three months of good news is only a starting point, but earnings, dividend and buyback announcements from the UK in the first quarter of 2025 all help to justify the improved showing, even if the challenge of tariffs is the next one for investors to confront.