The FTSE 100 was again under pressure on Tuesday as concerns grew about what Trump’s Presidency means for the UK and UK-listed companies.
The unpredictability of what Donald Trump will actually do when he returns to the Oval Office is proving to be a great source of angst for investors.
A Trump presidency would be great for the US and US stocks, but the fear is that the benefits to the US through Trump’s ‘America First’ policies would be to the detriment of the rest of the world—apart from Russia, of course.
“The FTSE 100 had a weak start as most sectors were in the red apart from energy and healthcare,” said Russ Mould, investment director at AJ Bell.
“HSBC was the biggest anchor on the index, joined by Unilever, GSK and RELX. Sentiment seemed patchy across the board as investors continued to spend time digesting the implications of a Trump administration. Despite the initial excitement upon the election result last week, investors are starting to realise that Donald Trump’s ideas could drive up inflation, make life tough for foreign companies selling into the US, and raise geopolitical risks. It creates the kind of uncertainty which markets hate.”
This nagging threat has dragged on the FTSE 100 since the election and continued to do so on Tuesday with broad selling across multiple sectors.
Fresnillo shares were sharply lower as precious metals continued to slide, and the risk premium built into prices before the election disappeared. At the time of writing, Fresnillo shares were down 6%.
ConvaTec was the FTSE 100’s top riser after the medical solutions released a surprisingly positive trading update and upgraded its revenue forecast for the year. Shares soared 20%.
“Two FTSE 100 stocks that rarely get much attention had their moment in the sun. ConvaTec and DCC were both in touching distance of 20% stock price gains, a highly unusual movement for the shares,” Mould said.
“ConvaTec soared after lifting 2024 guidance, helping to claw back half of the share price losses since March. DCC saw its shares rise 17% after saying it would get ready to sell its healthcare arm and potentially do the same for its technology business afterwards.”