Rolls-Royce: Shares in FTSE 100 giant rally on trade deal hopes
Shares in Rolls-Royce were driving the FTSE 100’s gains on Thursday as the UK looked poised to secure a trade deal with the US.
Shares in the Derby-headquartered group were trading up three per cent at 790.60p in early deals, closing in on its all-time high
The firm, which triumphed as Business of the Year at this week’s Morning Wire Awards, is a prominent exporter of aircraft, marine engines, and power systems with extensive ties to the global supply chain.
Streamlined trade between the US and UK would enable reduced inventory and logistic costs for the company.
Prime Minister Keir Starmer teased a deal during a statement on defence on Thursday morning.
He described working more closely with the US as “indispensable” for economic security.
“As you know, talks with the US have been ongoing, and you will hear more from me about that later today,” Starmer added.
Thursday’s rally followed a rocky few months for Rolls-Royce after President Donald Trump’s ‘Liberation Day’ levies shocked markets.
Rolls-Royce lost £10bn in value after tariffs
The sweeping tariffs across trading partners sent the engineering giant’s stock plummeting to a low of 635p.
Ahead of Trump’s announcement, Rolls-Royce shares were trading at an all-time high of 800p.
But in the wake of the White House’s fresh trade policy, £10bn was wiped off Rolls-Royce’s value.
Rolls-Royce notched a full recovery from its tariff woes in the last week, surpassing 750p – its highest price since ‘Liberation Day.’
The firm joined other defence stocks in a major rally in February after Starmer pledged to increase defence spending to its highest in decades.
The Prime Minister launched the “biggest sustained increase in defence spending since the end of the Cold War”, increasing the UK’s arms spending from 2.3 per cent to 2.5 per cent of GDP by 2027.
Shortly after the announcement, Rolls-Royce posted its full-year results where the firm booked £2.5bn in underlying profit, ahead of analyst consensus of between £2.1bn and £2.3bn.
Revenue topped £17.8bn, also beating analyst consensus of around £17.3bn.