The FTSE 100 traded broadly flat on Wednesday as London’s leading index avoided the wave of selling dragging on mainland European indices on fears of US tariffs.
“The FTSE 100 was the outlier in a sea of red across the main European indices,” said Dan Coatsworth, investment analyst at AJ Bell.
“Investors are growing increasingly concerned that Donald Trump’s next tariff target is continental Europe, creating another potential headwind on top of the existing one in the form of lacklustre economic activity.”
Trump took aim at Mexico, Canada, and China in a social media post this week, threatening 25% tariffs on Mexican and Canadian imports and an additional 10% tariff on China.
Weakness in Europe and sideways trade in London followed another record high for the S&P 500 overnight after investors reacted to increased hopes of an interest rate cut in December.
“The Fed’s Open Market Committee minutes leave the door open for another small interest rate cut in December, which also helped buoy sentiment,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.
“Caution is the name of the game at the Fed, amid economic uncertainty. The upcoming consumer price data and employment snapshots for November will be key data points to watch.”
easyjet
easyjet shares gained in London as investors cheered a proposed hike in its dividend following a period of strong trading in which profits soared 34%.
“easyJet has continued its upward trajectory, cashing in on strong demand from sunseekers, to deliver another record-breaking summer,” said Aarin Chiekrie, equity analyst, Hargreaves Lansdown.
“The revenue and profit uplift were largely fuelled by more holidaymakers snapping up the group’s expanded capacity, which grew 8% last year. That helped to keep planes running at over 89% full on average. Given the high fixed costs associated with flying planes, keeping them as full as possible is key to profitability. The package Holiday arm is also really taking off, with pre-tax profits up 56% as it continues to steal market share. Growth has been impressive and there looks like a long runway ahead for this thriving segment.”
easyjet’s board is recommending a 12.5p dividend, up from 4.5p last year.
Vistry was the top riser despite news the housebuilder was set to be demoted from the FTSE 100 after a series of warnings on profit following cost miscalculations at several of its projects. Vistry shares were 4.5% higher at the time of writing.