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FTSE rallies as Trump faces tariffs backlash

FTSE rallies as Trump faces tariffs backlash
 

The FTSE 100 has rallied, buoyed by a solid showing from US markets as president Donald Trump faced a backlash over his plans to impose tariffs on steel and aluminium imported into the country.

The UK blue-chip index jumped 72 points, or 1%, to 7,189, after a strong session for US markets saw the Dow Jones close 1.4% higher and the broader S&P 500 rally 1.1%.

Investors were buoyed by Republican House speaker Paul Ryan's intervention following Trump's announcement last week of plans to impose a 25% tariff on steel imported into the US, and 10% on aluminium.

'We are extremely worried about the consequences of a trade war and are urging the White House to not advance with the plan,' said AshLee Strong, Ryan's spokeswoman.

'The new tax reform law has boosted the economy and we certainly don't want to jeopardize those gains.'

Trump meanwhile signalled a softening of his stance, suggesting countries which signed up to a new North American Free Trade Agreement (Nafta) could be excluded from the tariffs.

'In the US yesterday, House speaker Ryan's comments and the general perception that last week's protectionist fears may have been too much too soon seemed to drive risk assets higher,' said Deutsche Bank's Jim Reid.

On the FTSE 100, Smurfit Kappa (SKG) led the way, jumping 18.6% to £30.44, after the paper packaging producer rejected a takeover bid from US rival International Paper (IP.N).

That provided a boost to fund manager Thomas Wilson, who holds a 4.4% of his £41 million F&C UK Mid-Cap fund in the company, which he also holds in his £63 million F&C UK Alpha fund.

The stock is meanwhile the top holding in Chris Hiorns' £92 million EdenTree Amity European fund, while £99 million Argonaut Absolute Return manager Barry Norris is also a backer, numbering the company in his top 10 at the end of last year, according to Lipper data.

the news buoyed rival packaging firms. DS Smith (SMDS) was up 4.2% at 298.9p while Mondi (MNDI) rose 4% to £19.82.

'This is based on hopes of consolidation in the packaging sector, one which may not top investors' list of the most exciting stocks but which has, nonetheless, offered significant share price gains since the 2009 financial crisis lows, helped by the meteoric rise of internet shopping requiring each of the packagers' wares to ensure the protection of goods during transit, and eclipsing many other blue-chip giants,' said Mike van Dulken, head of research at Accendo Markets.

Tesco (TSCO) was another strong riser, up 3.9% at 211.9p, as data from market researcher Kantar Worldpanel showed the UK's biggest retailer was the fastest growing of the big four supermarkets over the last three months, alongside Morrissons (MRW), whose shares were up 1.3% at 228.4p.

Shares in Tesco were also buoyed by analysts at Barclays reinstating their 'overweight' rating on the stock.

Just Eat (JE) meanwhile tumbled to the bottom of the FTSE 100, down 9% at 775.4p, as the takeaway platform said it would spend an extra £50 million this year to counter competition from Deliveroo and Uber Eats.

Among 'small-cap' stocks, shares in Luceco (LUCE) crashed 31% to 53.4p as the lighting company issued a profit warning.

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Thomas Wilson
Thomas Wilson
7/14 in Equity - UK Medium Companies (Performance over 3 years) Average Total Return: 26.56%
Barry Norris
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190/191 in Equity - Europe (Performance over 3 years) Average Total Return: 3.01%
Chris Hiorns
Chris Hiorns
227/253 in Equity - Europe (Performance over 1 year) Average Total Return: 1.26%
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