The FTSE 100 was heading for another positive week as London’s leading index notched up marginal gains in early trade on Friday. That was before Trump posted on social media that he was recommending a 50% tariff on the EU starting 1st June.
The FTSE 100 gains evaporated, and the index sank over 1% after Trump fired his latest shot in the trade war with the rest of the world.
Despite gyrations in global equities caused by concerns around US debt this week, the FTSE 100’s resilience and weighting towards defensive ‘safe-haven’ stocks overcame the worst of the concerns.
However, the threat of such a large tariff on the EU blew this out of the water, and the index was down 1.1% at the time of writing on Friday.
Trump’s social post undid strong gains recorded on Friday morning, with the FTSE 100 trading down 150 points from the highs.
“The FTSE 100 was propelled by AstraZeneca and Rolls-Royce which made the biggest contribution in terms of index points. The more domestic-focused FTSE 250 also nudged ahead, driven by a range of sectors including financials and real estate,” said Russ Mould, investment director at AJ Bell.
Miners were stronger on Friday morning with Anglo American topping the leaderboard as shares gained more than 4%. The sector was mostly negative following Trump’s post.
easyjet was higher as it rebounded from a sell-off yesterday on the back of its half year report. A number of positive broker price target upgrades would of helped attract interest in the stock. Bernstein raised its target to 575p and Barclays now has a 730p target. Goldman Sachs reduced their target slightly to 624p.
Games Workshop was the top faller after the tabletop gaming firm said they didn’t expect the sharp increase in licensing fees to continue into the next year.
“Games Workshop has enjoyed terrific success with licencing assets for the Warhammer 40,000: Space Marine 2 video game,” Russ Mould explained.
“There’s a warning that licencing gains seen over the past 12 months won’t be matched in the new financial year, which explains why the shares have pulled back on the trading update. However, the pipeline looks strong enough to keep most investors on side. In addition to another Space Marine game being developed, it has all the licencing income from a deal with Amazon to look forward to.”
Games Workshop shares were down 4.8% at the time of writing.