FTSE 100 flatlines as Trump order ramps up US-China tensions
The FTSE 100 flatlined on a choppy morning of trading after US President Donald Trump signed executive orders hitting Chinese firms Tiktok and Wechat, and Congress and the White House failed to agree on a stimulus plan.
London’s blue-chip index was roughly flat at 6,027 points at midday. The FTSE 250 of mid-cap firms rose 0.2 per cent.
In Europe, Germany’s Dax rose 0.2 per cent after strong industrial data. France’s CAC 40 was down 0.3 per cent and the pan-European Stoxx 600 was flat.
On the Hong Kong stock market overnight, shares in Tencent, the owner of messaging and payment app Wechat, tumbled five per cent.
In his latest salvo against China and its companies, Trump signed two executive orders banning US firms from doing business with video app Tiktok and Wechat, starting in 45 days’ time.
It comes hand in hand with Trump’s push for an American company to buy Tiktok. The moves, which bring some of the world’s most profitable companies into what some are dubbing a new cold war, have worried global investors.
“Tech was always an undercurrent in the US-Sino trade war,” said Fiona Cincotta, market analyst at trading platform City Index. But she added: “This latest move points to the potential start of a more explicit tech war.”
FTSE 100 investors hope for more stimulus
On top of this, US lawmakers yesterday failed to make headway in talks on the latest round of stimulus. Three hours of talks yielded nothing. White House chief of staff Mark Meadows said: “We’re still a considerable amount apart.”
However, investors did have some upbeat data to cling to. Germany’s manufacturing output rose nine per cent in June. It was helped by a 15 per cent jump in exports, figures showed today.
The German Statistics Office said the biggest month-on-month exports increase in 30 years was helped by strong demand from China.
“Markets here in Europe have had an up and down week,” said Michael Hewson, chief market analyst at CMC Markets.
He said investors were focusing on today’s US unemployment data for July. Hewson said markets “could still finish the week higher if today’s July US payrolls report is able to match some of the optimism from yesterday’s jobless claims numbers”.
On the FTSE 100, the biggest riser was Hikma Pharmaceuticals, soaring 10.4 per cent after it raised its dividend after a strong quarter. Rightmove followed with a 9.2 per cent jump after better than expected results.
The biggest faller was British Airways-owner IAG, a consistently volatile stock, with a 3.6 per cent fall. It was followed by publisher Pearson, which shed 3.1 per cent.