The FTSE 100 was steady again on Friday as the continued de-escalation of trade tensions supported US equities overnight and helped lift the mood in Europe on Friday.
London’s leading index was 0.1% higher at the time of writing and looked set for another weekly gain as the FTSE 100’s recovery from the Liberation Day selloff ground on.
“Another strong session on Wall Street yesterday lifted spirits at the end of the trading week, resulting in small but welcome gains across much of European equities markets on Friday,” says Russ Mould, investment director at AJ Bell.
“The past three weeks have been chaotic and investors have been subjected to a whirlwind of events. That chaos is now easing away and replaced by a tentative feeling of serenity. Donald Trump could easily turn markets back on their head with a single remark, but for now, we can embrace a moment of calm.
“First, we had indications that the Trump administration might soften its tone in the fight against China. Now we have reports that China might exempt certain US imports from tariffs. While tariffs are unlikely to go away completely, any easing of the trade war will be lapped up by financial markets.”
A softening in trade tensions was reflected in buying pressure for stocks that had been heavily impacted by Trump’s tariff announcement.
Melrose was the FTSE 100’s top gainer as bargain hunters continued to buy the engineering firm after being battered by tariff concerns.
Babcock and Rolls-Royce also gained, demonstrating a clear interest in the sector as concerns about the trade war subside.
There were also table gains for the US-tech focused Polar Capital Technology Trust after a strong session for the sector overnight. The trust’s top holdings include Nvidia, Apple and Alphabet.
The improvement in investor sentiment curtailed demand for gold, sending the price lower on Friday and taking Endeavour Mining to the bottom of the leaderboard with a 2% loss.