The FTSE 100 gained on Monday, shaking off any concern about the latest wave of tariffs from Trump 2.0, while BP helped support London’s leading index.

Trump tariffs were back in focus on Monday, with the President focusing on goods for which he’s long had a grievance. Trump has long voiced his concern about cheap steel imports and their impact on the US economy, so a 25% tariff on steel and aluminium didn’t come as a surprise to markets.

“Trump tariffs on steel and aluminium sold into the US is negative for markets on two levels,” explained Russ Mould, investment director at AJ Bell.  

“First, it suggests the new US president has only just got started with America’s budding protectionist trade policy. Second, it extends the affected countries beyond Canada, China and Mexico to places like Germany, Brazil, Japan and South Korea. 

“With the promise of further tariffs later this week, Trump’s actions threaten to cause considerable volatility on the markets over the coming days if there is a tit-for-tat response from affected countries.”

However, the threat of tariffs had little impact on equity markets on Monday with the FTSE 100 up over 0.5% at the time of writing.

“Markets are largely taking unfolding events in their stride. Stocks in China and Hong Kong were up overnight,” said Derren Nathan, head of equity research, Hargreaves Lansdown.

“Perhaps a mixture of trade restrictions not being as bad as they might have been and hope for further Chinese stimulus. Indices both sides of the Atlantic are still close to record highs, despite differing economic trajectories.”

BP was the FTSE 100’s top riser after Bloomberg reported that activist investor Elliot Investment Management had taken a significant stake in the oil major. BP shares surged over 6% on news the hedge fund would attempt to influence BP’s strategy with shares considerably undervalued compared to its peers.

“Tick tock, the window for Murray Auchincloss to convince the market he has a plan to revive BP’s fortunes just got shorter with reports that activist investor Elliott has joined the shareholder base,” Russ Mould said.

“BP has not just fallen behind the leading pack of US energy names but also the chasing pack which includes its closest peer Shell and other European names, both in terms of share price performance and valuation.”

BP was joined by other natural resource companies at the top of the FTSE 100 leaderboard in the hope that China would act to stimulate its economy and stave off any impact of Trump’s tariffs. This may prove to be wishful thinking, given recent measures by China have failed to sustain a rally in the miners.

Nonetheless, Fresnillo, Antofagasta and Endeavour Mining all rose more than 2%. Anglo American added 1%.

IAG was the top faller after Goldman Sachs cut its rating on the airline to ‘neutral’ from ‘buy’, which is understandable, considering IAG shares have more than doubled over the past year.

BP shares jumped on Monday following Bloomberg reports that activist investor Elliot Investment Management had built a stake in the oil major and intends to pressure BP’s management to rethink their approach.

The specific stake hasn’t been revealed, but it is said to be significant. BP shares were over 6% higher at the time of writing.

Elliot Investment Management is one of the world’s largest activist investors and regularly takes stakes in companies with a view of shaking up their strategy. Elsewhere in the UK, the hedge fund built stakes in Anglo American and the Scottish Mortgage Investment Trust last year.

BP is an easy target. Its shares are down heavily over the past year, and it trades at a discount to its peers in the US and even many in Europe.

The company has flip-flopped on its green energy transition strategy, leaving investors questioning where BP sees itself going over the coming years.

That said, it pays a robust dividend, making it an attractive target for an activist investor to deploy capital and work away at shaping its future.

Reports of Elliot’s stake come shortly before a BP investor day in late February when CEO Murray Auchincloss will outline the company’s plans.

Hargreaves Lansdown has reported a significant surge in gilt trading activity among its clients during January 2025, with both trading volumes and values reaching their highest levels since 2021.

The firm saw a 75% increase in gilt trading compared to January 2024, while trading activity nearly doubled compared to December 2024.

According to Hal Cook, Senior Investment Analyst at Hargreaves Lansdown, the spike in gilt yields during January 2025 presented an attractive opportunity for HL’s clients to lock in yields amid wider economic uncertainties.

Retail investors piling into gilts isn’t necessarily a signal interest rates have peaked, but it does provide interesting insight into investor positioning in the current macroeconomic backdrop.

“Gilt yields spiked higher in January, continuing a trend from September last year. The peak in yields on 13 January saw the 2 and 10-year yields hit around 4.6% and 4.9% respectively,” explained Hal Cook, senior investment analyst, Hargreaves Lansdown.

“Yields globally had increased due to a number of factors, not least the unknown impact of Trump’s policies, but also linked to the affordability of government debt. The two yields have since come back down to around 4.18% and 4.48% respectively. So, anyone who managed to time their purchases around the peak in yields (and trough in prices – prices and yields move in opposite directions) are already sat on a nice little profit. “

“Another potential factor was a specific gilt that matured on 31 January. This had been popular amongst retail clients as it had a low coupon (interest rate), which meant the majority of recent returns from it had come in the form of a capital gain (rise in price). Gilts owned directly are not subject to capital gains tax, and so this specific gilt had effectively offered most of its return tax free. With investors aware that the gilt was going to mature very soon, it’s likely many sold ahead of the maturity and reinvested in other gilts, given the spike in yields.”