The FTSE 100 jumped on Friday as investor confidence received a shot in the arm from the US/UK trade deal, even if it leaves the UK in a worse position than before Trump’s ‘Liberation Day’.
London’s leading index was trading 0.4% higher at the time of writing.
“Yesterday’s UK-US trade deal happened just before the UK market closed which meant quite a few investors won’t have had time to soak it all in and adjust portfolios accordingly,” said Russ Mould, investment director at AJ Bell.
“The FTSE 100 shrugged off the event in the heat of the moment, but advanced 0.4% in early trading on Friday as investors belatedly celebrated the agreement.
“Notably, the FTSE 100 top risers’ list was full of UK-listed stocks that do business in the US, such as retailer JD Sports, rat catcher Rentokil and industrial groups Smiths and Spirax.
“The trade deal was smaller than expected but strategically significant as it puts the UK in the friend zone for the US, a status whose importance shouldn’t be underestimated.”
As alluded to by Russ Mould, those stocks most heavily impacted by the introduction of Donald Trump’s tariffs put in the strongest performances on Friday.
JD Sports shares were ravaged by Trump’s tariffs due to its exposure to the US and a supply chain woven into the economies of the countries slapped with the highest tariffs. JD Sports shares were 2% higher on Friday and have rallied around 30% from their post-tariff lows.
IAG gained 2% after beating Q1 profit expectations on strong performance in North Atlantic services during the period.
The general uptick in investor confidence helped lift cyclical sectors on Friday. Miners Glencore and Anglo American were on the leaderboard, while oil majors Shell and BP added a notable number of points to the index as oil price rose.
“Brent is trading near 64$ pb up from the upper 50s level as cautious optimism kicked in from the demand side with relatively improved market sentiment on the back of high-level trade negotiations, US vs China, and the US-UK agreed trade framework,” explained Ahmad Assiri Research Strategist at Pepperstone.
Airtel Africa was the FTSE 100 top riser as the stock rebounded from a sharp sell-off yesterday.