The FTSE 100 gave up early gains on Thursday as investors remained cautious about the tit-for-tat trade war between the United States and its closest trading partners.
Lower-than-expected US producer prices helped contain losses as hopes of a Fed rate cut provided a reason for equity bulls to be optimistic.
Tariffs
The tensions between the US and Europe escalated today as Donald Trump responded to 50% tariffs on US whisky by threatening a 200% tariff on French wine in a post on his Truth Social platform.
Canada’s latest move was to slap 25% tariffs on around $20bn of US goods. Yesterday, the US implemented 25% tariffs on steel and aluminium imports, sending waves through markets.
Investors are becoming exhausted by the frantic nature of threats, and uncertainty is proving to be a major drag on sentiment. As a result, the FTSE 100 gave back gains on Thursday and traded negatively.
London’s leading index rose around 0.4% before falling back to trade down 0.1% at the time of writing.
“Investors remain on the edge of their seat as they weigh up the impact of tariffs and whether ceasefire talks will yield an agreement between Russia and Ukraine. Despite a small bounce-back last night on Wall Street, nervousness prevailed across Asia and Europe on Thursday,” says Russ Mould, investment director at AJ Bell.
Halma
Halma was the FTSE 100’s top gainer after announcing it was on track for another year of record EBITDA despite ‘varied’ trading in end markets.
“Halma, a FTSE 100 leader in life-saving technologies, has delivered yet another robust trading update, putting it firmly on course for an impressive 22nd consecutive year of record profits,” said Matt Britzman, senior equity analyst, Hargreaves Lansdown.
“Despite navigating tricky economic and geopolitical conditions, Halma’s resilient business model and agile operations mean margins are better than expected, and that should mean profit expectations for the year can tick higher. In today’s volatile environment, steady and dependable businesses like Halma – while not always headline-grabbing – offer investors an attractive blend of quality and reliability when it’s needed the most.”
Halma shares were 2% higher at the time of writing.
Housebuilders were one of the biggest drags on the index after the most recent RICS survey pointed to softness in the housing market. Persimmon and Barratt Redrow both fell more than 2%.
“UK housebuilders faced fresh headwinds in February, as RICS survey data suggested the property market might be losing some of its recent momentum,” Britzman explained.
“Fewer estate agents reported rising house prices than anticipated, with buyers and sellers both stepping back amid caution around looming stamp duty changes and wider global uncertainty.”