The FTSE 100 rose again on Tuesday while US stocks surged, following the inauguration of Donald Trump as president.
London’s blue-chip index gained 27.75 points to finish the day at 8,548.29, up 0.3% on the day before.
UK stocks continued to perform well despite uncertainty over what the new president’s policy on trade tariffs would be.
Mr Trump stopped short of imposing widespread tariffs on the US’s trading partners, instead suggesting only that there would be 25% tariffs on imports from Mexico and Canada.
For someone who has talked repeatedly about wanting American companies to buy American goods and to deter foreign countries from profiting from the US, it was a surprise to see tariffs take a back seat as Trump put his new powers to use
Russ Mould, investment director at AJ Bell, said investors were trying to get a grip on what the new Trump administration would put in place, separating the fact from the speculation.
“The big surprise was a lack of immediate action on trade tariffs as part of Trump’s initial list of executive orders,” Mr Mould said.
“For someone who has talked repeatedly about wanting American companies to buy American goods and to deter foreign countries from profiting from the US, it was a surprise to see tariffs take a back seat as Trump put his new powers to use.
“However, Trump did manage to comment on tariffs before inauguration day was over. He implied 25% tariffs on imports from Mexico and Canada could happen as soon as February 1.
“Naturally, that caused their respective currencies to weaken and for US equity futures to ease back, albeit the latter only temporarily as S&P 500 futures have subsequently pushed higher.”
Shortly after markets closed in London the S&P was trading up 0.7% while the Dow Jones was up more than 1%. Both indexes had been closed on Monday for Martin Luther King Jr day in the US.
In Europe, Germany’s index closed up by a quarter of a per cent, while the Cac 40 in Paris rose 0.5%.
Shortly after stock markets closed in Europe the pound was trading up 0.1% against the dollar at 1.2331, while against the euro it was more or less flat at 1.1825.
In company news, shares in Boohoo rose 2.4% after the business saw off another attempt by Frasers Group to overhaul its leadership.
Shareholders voted 63% against the plans tabled by Frasers which would have removed Boohoo’s chief executive and co-founder Mahmud Kamani. Mr Kamani owns a 12% stake in the fast-fashion retailer.
Elsewhere, Shoe Zone said its pre-tax profit had dropped by 38% in the year to the end of September, dropping to £16.2 million as sales fell by 2.7%. It blamed energy, shipping and wages costs for the fall in profit.
Shares in the business closed down 5%.
After the Christmas period, Premier Foods hailed a strong performance that would see it reach the top end of its shareholder guidance after the Mr Kipling maker’s mince pie sales impressed.
Group sales rose 3.1% over the 13-week period which includes Christmas, driven in part by the best-ever quarter for mince pies, of which sales were up 20% on the year before. By the end of the day shares were up 2.6%.
The biggest risers on the FTSE 100 were Lloyds, up 2.34p to 61p, Games Workshop, up 430p to 13,980p, Endeavour Mining, up 45p to 1,559p, Airtel Africa, up 3.2p to 127p, and Ashtead, up 136p to 5,466p.
The biggest fallers on the FTSE 100 were Pershing Square, down 118p to 4,182p, AB Foods, down 53p to 1,949p, Rightmove, down 17p to 647.4p, Glencore, down 6.6p to 380.6p, and Haleon, down 6.1p to 367.3p.
