FTSE 100 hits new high amid US trade talk optimism

Independent

4 days ago

European stocks climbed on Wednesday, boosted by hopes of further progress in trade talks after the US struck a deal with Japan.
The FTSE 100 index closed up 37.68 points, 0.4%, at 9,061.49, a record closing peak. It had earlier hit an all-time high of 9,080.09.
The FTSE 250 closed up 79.23 points, 0.4%, at 22,013.49 and the AIM All-Share closed up 3.85 points, 0.5%, at 773.99.
In European equities on Wednesday, the Cac 40 in Paris advanced 1.5%, while the Dax 40 in Frankfurt gained 0.8%.
In New York, the Dow Jones Industrial Average was up 0.4%, the S&P 500 traded 0.3% higher and the Nasdaq Composite firmed 0.2%.
Late on Tuesday, President Donald Trump said the US had agreed a 'massive' trade deal with Japan that would include a 15% tariff on its exports.
He had previously threatened Japan, a major US trading partner, with a tariff of 25% beginning on August 1 if a deal was not reached.
'We just completed a massive Deal with Japan, perhaps the largest Deal ever made,' Mr Trump announced on social media.
Under the deal, 'Japan will invest, at my direction, USD550 Billion Dollars into the US, which will receive 90% of the Profits', he added.
Japanese Prime Minister Shigeru Ishiba was more circumspect, saying he needed to examine the deal before commenting.
'As for what to make of the outcome of the negotiations, I am not able to discuss it until after we carefully examine the details of the negotiations and the agreement,' he told reporters in Tokyo after Mr Trump's announcement in Washington.
The deal comes after Mr Ishiba faced a bruising weekend election that left his coalition without a majority in the upper house.
'The trade agreement is undoubtedly good news for Japan,' said Kathleen Brooks at XTB. 'The auto component is by far the biggest coup for Japan, as that makes up the bulk of exports to the US.
'By lowering the auto tariff rate to 15% – auto tariffs were a flat 25% rate before the exemption for Japan – it is giving hope that those countries who have yet to agree tariff rates with the US can seal good deals if they pledge investment into the US.'
The trade pact sent equities soaring in Asia with the Nikkei 225 closing up 3.5% on Wednesday and the Hang Seng in Hong Kong gaining 1.6%.
Car makers such as Toyota climbed 14%, and Honda jumped 11%. Mitsubishi rose a more modest 3.6%.
European car makers rose, with BMW, Mercedes-Benz Group and Volkswagen up 4.4%, 5.9% and 5.3% respectively, in Frankfurt. Renault was up 2.6% in Paris, and Citroen and Fiat owner Stellantis was up 8.9% in Milan.
In London, luxury car maker Aston Martin Lagonda rose 8.1%.
Deutsche Bank's Jim Reid said the Japan deal has 'significantly raised hopes that the EU might also be able to reach a trade deal, as they've been threatened with 30% tariffs on August 1'.
Attention in the US will also be on tech earnings, with results due from Tesla and Alphabet after the closing bell in New York.
The pound rose to 1.3571 dollars late on Wednesday afternoon in London, compared with 1.3508 at the equities close on Tuesday. The euro traded at 1.1737 dollars, slightly up against 1.1735. Against the yen, the dollar was trading lower at 146.33 compared with 146.49.
On the FTSE 100, Informa rose 5.3%.
It raised its full-year outlook and added to its share buyback after reporting 20% growth in half-year sales and adjusted profit.
The London-based international events, digital services and academic publishing business increased full-year underlying revenue growth guidance to at least 6% from at least 5%, including 8% plus in Live B2B Events.
The dividend was increased by 9.4% to 7.0 pence from 6.4p.
In addition, Informa said it would buy back a further £150 million of shares through the second half of 2025, taking the total commitment to £350 million in 2025.
On the FTSE 250, Breedon tumbled 7.3% as it forecast that full-year profit will be at the low end of market expectations.
The Leicestershire-based building materials company said that given a 'difficult' first half and macroeconomic headwinds, 'we now expect our result for the full year will be at the low end of the current range of market expectations'.
Breedon put the range for 2025 earnings before interest, tax, depreciation and amortisation between £291.4 million to £311.5 million, growth of at least 19% from £245.8 million in 2024.
Halfords rose 2.9% as Panmure Liberum upgraded it to 'buy' from 'hold' with a 200p share price target.
The broker noted 'evidence of tangible green shoots' and said recent trading has pointed to a fundamental improvement rather than a one-off performance.
'However, given previous false dawns, investors may require further evidence before declaring a new era,' Panmure Liberum added.
The yield on the US 10-year Treasury was quoted at 4.38%, up from 4.34%. The yield on the US 30-year Treasury was quoted at 4.94%, widened from 4.91%.
The biggest risers on the FTSE 100 were Informa, up 40.8p, at 866.8p, JD Sports Fashion, up 3.9p at 89.7p, AstraZeneca, up 322.0p at 10,674.0p, Ashtead, up 122.0p at 4,857.0p and Croda International, up 62.0p at 2,879.0p.
The biggest fallers were Centrica, down 5.3p at 158.7p, SSE, down 58.0p at 1,912.0p, United Utilities, down 28.5p at 1,138.5p, Severn Trent, down 66.0p at 2,717.0p and National Grid, down 22.0p at 1,062.5p.
Brent oil was quoted lower at 68.24 dollars a barrel in London on Wednesday, from 68.30 dollars late on Tuesday. Gold eased to 3,412.38 dollars an ounce against 3,426.29 dollars.