The FTSE 100’s defensive attributes helped propel the index to fresh intraday highs on Wednesday as investors settled into the new narrative created by Donald Trump’s second term in the White House.
London’s leading index was 0.3% higher at the time of writing after printing all-time intraday highs above 5,580.
Donald Trump seems to be taking a similar approach to his first term by firing off sweeping remarks on possible measures but taking time to implement them, allowing markets to digest and react to changes.
Trump said he would end the war in Ukraine in one day, yet has so far only threatened Russia with the weaponisation of the oil price. This would be a process that could take months, even years, to have its desired effect on the Russian economy and Putin.
The lack of major economic action by Trump is something of a comfort to markets. The new president has satisfied his base with proposed measures to remove illegal immigrants and close the southern border but has so far held off slapping 20% tariffs on Canada and Mexico.
This could all change, but for now, Trump’s softer approach is being welcomed by markets.
“Investors are batting away concerns about the impact of President Trump’s policies on the global economy,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.
“The make up of the FTSE 100 also offers resilience in an uncertain world, with pharma, consumer staples, and utility stocks offering the prospect of stable returns whatever the economic weather. Although Chinese stocks fell back after POTUS pledged to hit China with an extra 10% tariff on goods imported into the US, there are hopes a tit-for-tat retaliation won’t materialise.”
Intermediate Capital Group surged to the top of the FTSE 100 leaderboard after reporting strong capital raising during the last quarter which will set the group up for higher management fees in the years to come. Asset under management rose 5.1% quarter-on-quarter. Intermediate Capital Group shares jumped 6%.
Easyjet was one of the FTSE 100’s biggest casualties after releasing a soft trading statement that raised questions about their outlook.
“EasyJet’s update lacked pizzazz. Saying that current booking trends are ‘supportive’ of full-year market expectations doesn’t exactly instil confidence. It’s woolly language which doesn’t go down well with investors,” said Russ Mould, investment director at AJ Bell.
“Admittedly the airline is only one quarter into its financial year, but the market needs reassurance that everything is going swimmingly for the business given the fragile economic backdrop and weakening consumer confidence. The fact the share price fell on the update suggests investors are disappointed.”