London’s main stock indexes inched higher on Monday as investors assessed a trade deal between the United States and the European Union.
The internationally oriented FTSE 100 rose 0.1 per cent, while the midcap FTSE 250 index was up 0.3 per cent.
Elsewhere, European stock markets appear to have settled down after the initial excitement of the reaction to the US-EU trade deal.
The Stoxx 600, tracking the biggest European companies, is up 0.5 per cent. Germany’s Dax index is flat, while France’s Cac 40 is up 0.3 per cent.
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The US struck a framework trade agreement with the EU on Sunday, which imposes a 15 per cent tariff on most EU goods and requires the bloc to invest around $600 billion in the US.
British prime minister Keir Starmer will meet US president Donald Trump in Scotland on Monday for talks ranging from their recent bilateral trade deal to the worsening hunger crisis in Gaza.
Automobiles and parts stocks led the sectoral gains, up 1.1 per cent. The real estate sector advanced 0.8 per cent, with Rightmove up 2.3 per cent and Segro rising 1.1 per cent.
On the flip side, industrial miners led the sectoral declines, down 0.9 per cent, tracking lower metal prices.
Miners Glencore lost 1.4 per cent and Rio Tinto fell 1 per cent.
In company news, GSK rose 1.3 per cent after the drugmaker and China’s Jiangsu Hengrui Pharmaceuticals agreed on a $500 million deal to develop up to a dozen new medicines, including a promising candidate for a chronic lung condition.
Ocean Wilsons Holdings lost 10.6 per cent, top loser on the mid-cap FTSE 250 index, after the investment holding company and Hansa Investment agreed to an all-share merger to create a diversified investment firm with more than £900 million in net assets.
Meanwhile, the Bank of England is expected to slow the pace soon at which it shrinks its £558 billion holdings of government bonds, with economists hoping for some clarity next week on the central bank’s longer-term goals for the stockpile.
Traders are currently pricing in an 86.5 per cent chance of a 25 basis point BoE cut on August 7th, according to data compiled by LSEG.
Meanwhile, Wall Street futures ticked up. The prospect of a US-EU deal already propelled the S&P 500 and the Nasdaq to record closes on Friday, with the Dow just shy of its all-time high.
At 6.50am eastern time, S&P 500 E-minis were up 0.16 per cent; Nasdaq 100 E-minis were up 0.32 per cent; and Dow E-minis were up 0.09 per cent.
“A 15 per cent tariff on European goods, forced purchases of US energy and military equipment and zero tariff retaliation by Europe, that’s not negotiation, that’s the art of the deal,” said Prashant Newnaha, senior Asia-Pacific rates strategist at TD Securities. “A big win for the US.”
MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.27 per cent, just shy of the almost four-year high it touched last week. Japan’s Nikkei fell 0.8 per cent after hitting a one-year high last week. – Reuters
