A member of employees subsequent to a buying and selling board on the London Inventory Change on April 25, 2025.
Carl Court docket | Getty Photographs
Whereas world markets have been gripped by turbulence within the wake of U.S. President Donald Trump’s seesawing tariffs insurance policies, British shares have loved a bumper rally.
London’s FTSE 100 index, which has gained 4.8% because the starting of the yr, was 0.8% increased at 1:00 p.m. within the U.Okay. on Friday — placing it on observe for its longest ever run of day by day positive factors. Later within the afternoon, the index rose above 8,600 factors, recovering its losses because the day the ultimate checklist checklist of Trump’s reciprocal tariffs was unveiled.
On Thursday, the index closed marginally increased, marking its fourteenth consecutive session of positive factors. This has occurred solely as soon as earlier than, in 2017, when the FTSE 100 noticed fourteen back-to-back day by day rises.
London’s extra domestically centered FTSE 250 has additionally been on a profitable streak of late, having notched seven consecutive days of positive factors by Thursday’s closing bell. On Friday, the index was buying and selling flat, paring earlier positive factors. If the index ends Friday’s session in optimistic territory, it could mark the FTSE 250’s longest run of positive factors since late 2020.
London-listed equities that noticed the most important positive factors on Friday included British meals outlet operator SSP Group, up 4%, English healthcare agency Haleon, up 3.8%, and U.Okay.-based aerospace agency Melrose Industries, which rose by 3.6%.
Protected haven for tariffs?
With regards to what’s fueling the rise of British inventory markets, the U.Okay.’s distinctive place away from the firing line of recent U.S. tariffs is a part of the image, in accordance with Naeem Aslam, chief funding officer at London’s Zaye Capital Markets.
“The easing of U.S.-China commerce tensions and the removing of tariff threats have boosted confidence, whereas the UK’s impartial commerce standing has shielded it from the extra punitive levies confronted by the European Union or China,” he mentioned in an e-mail.
The U.Okay. has been spared from the brunt of the Trump administration’s so-called reciprocal tariffs, and final month Vice President JD Vance mentioned he noticed a “good likelihood” of Britain forging a commerce cope with the US that might give the U.Okay. additional reprieve from the duties.
“The index’s defensive giants — healthcare (e.g., AstraZeneca), power (e.g., Shell), and client staples — have drawn traders looking for refuge from volatility, supported by a excessive dividend yield of between 3.5% and 4%,” Aslam informed CNBC on Friday.
“Moreover, sturdy company outcomes from the likes of Whitbread (+3.4%) and Entain (+6.8%), mixed with a resilient UK financial system rising at an annualized fee of 1.5%, additionally add gas to the rally, making the FTSE 100 a relative secure haven.”
Aslam mentioned the FTSE 100’s upward momentum may proceed if defensive shares stay in favor — nevertheless, he famous that there have been “dangers abound.”
“Technical level to the index, being overbought … suggesting a pullback,” he mentioned. “Geopolitical hotspots or revived tariff tensions could upset momentum, whereas a firmer pound (round $1.30) may put strain on export-heavy members.”
Nevertheless, he famous that undervaluation relative to the FTSE 100’s world friends mixed with expectations of a number of rate of interest cuts from the Financial institution of England this yr, may push the index as excessive as 8,900 factors by the tip of subsequent month — a return of round 4% from present ranges.
Susannah Streeter, head of cash and markets at Hargreaves Lansdown, agreed that the blue-chip index has the potential to increase its file run.
“The FTSE 100 has considerably extra energy in reserve and will have additional to run, on condition that the index shouldn’t be but regained the file ranges reached in March,” she informed CNBC through e-mail on Friday.
Nevertheless, she famous that uncertainty over U.S. commerce coverage and the extent of the impact on the worldwide financial system, had the potential to place a lid on additional positive factors.
In a observe to purchasers on Thursday, Financial institution of America strategists ranked the UK as its 10th finest performing fairness market with returns of 12.6% from the start of the yr to the tip of April. The highest of the checklist was dominated by European markets together with Spain, Greece and Germany, whereas U.S. shares — down by round 5% on a year-to-date foundation — had been ranked in 20th place.
Bob Huxford, head of the general public corporations division at London-based communications company SEC Newgate, informed CNBC on Friday that volatility in U.S. fairness markets offered British capital markets with a chance to regain among the floor misplaced to the U.S. lately.
“The London market has undergone 9 successive years of outflows, with 2024 the worst yr on file when £9.6 billion left our shores, principally headed for America,” he mentioned. “Present uncertainty within the US inventory market affords an opportunity for the UK to reverse this development. Cash is already flowing from the US, and there are a bunch of the explanation why the UK represents a port in a storm amid the market turmoil.”
— CNBC’s Ganesh Rao contributed to this report.
