The FTSE 100 is trading in a holding pattern as investors try to work out what to make of the latest twist in the US trade tariff saga.
London’s leading index was trading up just 5 points after Donald Trump revealed his latest trade tariff plans overnight.
Trump’s latest round of tariffs made as little sense as his first round so there is some consistency on that front.
However, there is a severe lack of consistency in the timing of tariffs with a new date of 1 August touted as the deadline. The fluid nature of when tariffs will come into force raises the question if they ever will come into force and traders are opting to sit on their hands.
“The TACO (Trump Always Chickens Out) trade is back on the table as the Trump administration’s latest announcements on tariffs offered some relief to financial markets,” said AJ Bell investment analyst Dan Coatsworth.
“While new levies were announced for 14 trading partners, news of a pause until 1 August to allow for further negotiations was received positively. This removes the immediate cliff edge created by a 9 July deadline and US president Trump has indicated that even this new date is not set in stone.
“On the flipside, this only extends the uncertainty with markets likely to spend the next three weeks trying to guess the ultimate outcome. If tariffs are a negotiating strategy it appears they may be a rolling one, with constant bartering and trade policy being used in the service of US foreign policy goals.”
The indecision in markets was reflected in a FTSE 100 that was split almost down the middle in terms of gainers and losers.
With little in the way of major corporate developments, sector-based gyrations kept the index fairly flat on Tuesday.
Pharma stocks were among the losers as a rebound in BP and Shell helped offset losses elsewhere. Miners were also among the winners.
Housebuilders were again in the red as the impact of an upbeat assessment of the UK property market by Halifax yesterday wore off.
Entain was the top FTSE 100 riser with a gain of 3%.