Britain’s Ftse 100 surged at the open on Thursday as investors reacted to easing trade tensions between the US and Europe.
The index jumped 0.7 per cent to 10,208.07 after Donald Trump stepped back from plans to impose new tariffs.
The rally followed confirmation from the president that he would not go ahead with additional 10 per cent levies on eight European countries.
Global markets responded positively after Trump said he had received a “framework of a future deal” during talks with NATO allies over Greenland.
Sterling was steady in early trading, holding above $1.34 against the dollar as investors welcomed the shift in tone.
The mid-cap FTSE 250 index also benefited from the improved sentiment, advancing 0.7 per cent to 23,227.48.
Markets had endured a difficult week prior to the announcement, with concerns over an escalating trade conflict weighing heavily on investor confidence.
Wall Street had already responded positively overnight, with the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite each gaining 1.2 per cent, recovering some of Tuesday’s substantial losses.
Banking and pharmaceutical stocks led the charge among individual shares, with Barclays and AstraZeneca both rising two per cent in early trading.
The index jumped 0.7 per cent to 10,208.07 after Donald Trump stepped back from plans to impose new tariffs
|
GOOGLE/GETTY
Drinks giant Diageo added 1 per cent, while telecommunications companies enjoyed particularly strong gains as BT Group increased 4.3p to 188.4p and Vodafone climbed 2.2p to 103.2p.
Not all shares participated in the rally, however. Beazley dropped three per cent to 1089p after its board unanimously turned down a 1280p per share acquisition offer from Zurich Insurance.
LATEST DEVELOPMENTS:
Michael Brown, analyst at Pepperstone, noted that while negotiations on specific details would continue, markets were largely unconcerned with the finer points.
“The crux of the matter is that, undeniably, geopolitical risk has been taken down several notches on the back of this news,” he said.
Donald Trump stepped back from plans to impose new tariffs
|
Getty/ReutersSusannah Streeter, Chief Investment Strategist at Wealth Club, described the market response as “a sigh of relief as icy geopolitics relations defrost.”
She cautioned that the White House’s unpredictable approach to policy remained a concern, with investors continuing to seek refuge in safe haven assets.
Gold prices initially fell sharply as the tariff threat receded, though they subsequently began recovering as broader concerns about geopolitical volatility persisted.
Asian markets had already surged overnight in response to the news. Japan’s Nikkei index climbed nearly 2 per cent, while South Korea’s Kospi broke through the 5,000 barrier for the first time in its history.
The pan-European Stoxx 600 rose 1 per cent, clawing back ground after trade war fears had knocked 1.9 per cent off the index earlier in the week
|
GETTYEuropean bourses joined the rally as the continent’s exporters breathed easier. The pan-European Stoxx 600 rose 1 per cent, clawing back ground after trade war fears had knocked 1.9 per cent off the index earlier in the week.
Paris saw particularly strong gains, with the CAC 40 jumping 1.2 per cent as French luxury goods firms were freed from the tariff threat. Germany’s DAX advanced 0.7 per cent to 24,873.50.
Volkswagen shares surged 4.3 per cent as Europe’s largest carmaker benefited both from the removal of tariff concerns and better-than-anticipated net cash flow figures for 2025.