The FTSE 100 gained on Wednesday as investors tentatively dipped their toes back into stocks in early trade after another poor finish to yesterday’s trade.
Gains accelerated after a softer-than-expected US CPI raised hopes of a Fed rate cut. Consumer prices rose 2.8% in February, compared to estimates of 2.9%.
After days of sharp declines in Europe and the US, equities showed signs of stabilisation on Wednesday. But as we’ve seen already this week, these gains could be short-lived should Trump decide to attack another trading partner with a fresh tariff.
“The winds keep blowing in different directions on tariffs that it is impossible for markets to establish the lay of the land,” said Russ Mould, investment director at AJ Bell.
“Donald Trump keeps moving the goal post and investors are getting fed up. Metal tariffs are today’s special on the menu and they’ve been a major catalyst for many of America’s trading partners to retaliate with tariffs on other goods.”
It’s difficult to call the 0.6% gain in London a rebound, as it barely retraces yesterday’s losses. It certainly doesn’t put a dent in losses since the FTSE 100 flirted with all-time highs just last week.
Nonetheless, the rise in London’s flagship index will be welcomed by equity traders who have been battered by Trump’s outlandish trade policies.
That said, Donald Trump’s change of approach to Ukraine could be seen as a major positive for stocks after Ukraine-US talks resulted in the commitment to a cease-fire.
FTSE 100 movers
Most industry sectors were higher on Wednesday, with banks and financials among those rising on the day.
The best performers were Melrose and Spirax as bargain hunters picked the shares up after heavy losses for the pair following soft updates. Melrose was the top riser with and eye-catching 8% gain.
The biggest drag on the index were retailers who dropped in sympathy with poor results from Spanish Inditex’s downbeat assessment of the industry.
“JD Sports, Primark-owner Associated British Foods and Next retreated after negative read across from Inditex’s results. Fears of a slowdown in the retail sector were to blame,” Russ Mould said.
AB Foods was the top faller, losing 4%.