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Trade tensions hold back FTSE as Vodafone slides on dividend fears

FTSE 100 flat as US president Donald Trump considers slapping further $300 billion of tariffs on remaining Chinese imports

Trade tensions hold back FTSE as Vodafone slides on dividend fears

The FTSE 100 has lingered around the 7,200 mark, as US president Donald Trump considered raising tariffs on all the remaining $300 billion worth of goods imported from China.

Trump said the US was ‘right where we want to be with China’ in a tweet.

This followed the US increasing tariffs on $200 billion of Chinese exports on Friday, raising rates from 10% to 25%, with China threatening to retaliate.

‘The rhetoric and posturing is not good for risk and events over the last few days diminish the likelihood we will see a meaningful deal done,’ said Neil Wilson, chief market analyst at 

Oil majors rose as prices climbed 0.8% to $70.94 a barrel, on fears of supply disruptions in the Middle East. BP (BP) added 1% to 529p and Shell (RDSb) gained 1% at £24.68.

Centrica (CNA) advanced 2% to 94p after the British Gas-owner maintained its annual operating cash flow and new debt forecast.

However, Ian Forrest, investment research analyst at The Share Centre, said: ‘Following the profit warning in February, confidence in the group and management was already low and today’s news has done nothing to improve that.

‘The market is expecting a 20% drop in the dividend this year but even that now looks optimistic given the very high prospective yield of 10%. This is a medium to high risk hold for income seekers only.’

Vodafone (VOD) was a major faller on the main market, giving up 4% or 134p, on reports the telecoms business would slash its dividend in order to invest in 5G mobile networks and tackle its €32 billion debt pile.

The FTSE 250 lost 98 points, or 0.5%, at 19,269, with Metro Bank (MTRO) slipping 4% to 510p.

This followed rumours on WhatsApp of further financial turmoil at the retail bank, prompting customers to rush to withdraw funds over the weekend, ahead of a £350 million rights issue this week.

‘Assuming it raises £350 million later this week, Metro Bank will then have to prove to the market and its customers that the business is robust and capable of growing without needing regular capital injections and also without a repeat of the recent accounting error,’ said AJ Bell investment director Russ Mould.

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6 Comments FCA: we'll visit every DB transfer adviser if we need to

FCA: we'll visit every DB transfer adviser if we need to

The Financial Conduct Authority has pledged to visit every firm offering defined benefit pension transfer advice if necessary to improve suitability levels across the market