FTSE 100 nears record high but Trump threat lingers
The FTSE 100’s latest rally has put it inches away from sealing an all-time high but another tariff twist from the White House threatens the record.
The UK’s flagship index was up one per cent to around 8,800p during midday trading on Tuesday as it reversed Friday’s losses made after Trump threatened the European Union with a 50 per cent levy.
The index shed over 100 pointson the news as markets across Europe tumbled into the red.
But after a bank holiday break, where Trump retreated on his latest threat, the UK’s blue-chip stocks have surged.
Russ Mould, investment director at AJ Bell, said: “The latest U-turn on tariffs from the Trump administration gave European markets a boost yesterday and have helped UK stocks return from the Bank Holiday with pep in their step.”
FTSE 100 defence stocks led the rally, with British Airways owner IAG up over four per cent and Melrose over three per cent. Rolls-Royce jumped over two per cent.
Meanwhile, miners topped the fallers. Endeavour and Fresnillo both slumped over three per cent and Rio Tinto nearly one per cent.
The mid-cap FTSE 250 was up 1.15 per cent.
FTSE 100 benefits from Trump uncertainty
Mould said: “The market is beginning to come to the view that the US trade policy’s bark is worse than its bite as an initial threat of 50 per cent tariffs on EU goods by the beginning of next month has been pushed back until July 9 to allow time for talks to continue.”
Across Europe, markets joined London in the green.
Germany’s DAX and Amsterdam’s AEX gained 0.8 per cent and the CAC 40 in Paris 0.3 per cent.
Whilst trade talks between the US and EU are back on track, a breakdown could send markets back into turbulence.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, described the mood as “cautious relief” with “hopes for more fruitful trade negotiations.”
Trump rowed back on the levy threat after a “very nice” call with President of the European Commission Ursula von der Leyen.
Von der Leyen said: “The EU and US share the world’s most consequential and close trade relationship. Europe is ready to advance talks swiftly and decisively.”
But the European Commission’s chief said the EU would “need the time until July 9” in order to reach a good deal.