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FTSE hits fresh all-time high as trade war put 'on hold'

FTSE hits fresh all-time high as trade war put 'on hold'
 

The FTSE 100 has hit a fresh all-time high, as a broad-based rally took hold following comments from US Treasury secretary Steven Mnuchin (pictured) that a trade war with China has been placed 'on hold'.

The UK blue-chip index jumped 59 points, or 0.8%, to 7,838, marking a fresh all-time intraday high. The index is on course to notch up a new all-time closing high, beating the 7,779 level hit on Thursday.

The rally took hold across the board, with only a handful of stocks failing to make gains.

The rise in the dollar on Mnuchin's comments also provided a boost, up 0.5% against the pound at $1.34 and bolstering the FTSE 100's overseas earners.

Mnuchin said on Sunday talks with China had produced a framework for addressing trade imbalances.

'We are putting the trade war on hold. Right now, we have agreed to put the tariffs on hold while we try to execute the framework.'

The US last month unveiled plans for a 25% tariff on 1,333 Chinese products, covering imports worth around $50 billion (£35 billion). China responded with a proposed 25% tariff on 106 US products.

'It looks like many of the tariffs agreed by the US and China could be ripped up after this weekend's positive joint announcement, although it seems the US may be keeping some glue handy in case they decide China is not meeting its obligations,' said Deutsche Bank's Jim Reid.

Connor Campbell, financial analyst at Spreadex, said investors were viewing the announcement with some scepticism.

'You could make the case that the removal of the trade war threat should have sent the markets even higher,' he said.

'However, there does seem to be a healthy dose of scepticism behind the admittedly still solid growth; there have been similar instances over the last few months to suggest improving relations between the US and China, only for an errant tweet from Trump to dent hopes of de-escalation.'

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