Market update: Stocks advance on US-EU deal, GSK shares higher
09:46 , Graeme EvansRelief over a US-EU trade deal today benefited the FTSE 100 index in a session when leading European benchmarks rose by as much as 1%.
The agreement will cap levies on most EU exports to the US at 15%, half the 30% level that the White House had threatened if no deal was reached by 1 August.
The EU has also committed to buy $750 billion of US energy and invest an additional $600 billion.
Meanwhile, speculation that the US and China have agreed to extend their tariff truce for another three months also bolstered sentiment.
The FTSE 100 index consolidated its recent strong run with a rise of 14.08 points to 9134.39, while the Cac 40 in Paris rose 1% and Frankfurt’s Dax by 0.6%.
Semiconductor equipment firm ASML jumped 4% and car maker Mercedes-Benz by 3%, alongside smaller gains for healthcare stocks Roche and Novartis.
However, defence firms including Rheinmetall fell back after President Trump secured a US defence spending commitment as part of the EU deal.
UBS Global Wealth Management said Sunday’s agreement is likely to reinforce the narrative that the worst of the trade conflict has passed.
However, it added: “While markets will be encouraged by the greater degree of certainty on US-EU trade, the level of US tariffs has still increased roughly sixfold from prevailing levels before Liberation Day.
“The economic impact of these tariffs is currently feeding through, and uncertainty remains about the scale, distribution, and second-order effects. In the days and weeks ahead, payrolls, inflation, and retail sales data will be closely scrutinised.”
Risers in London included GSK, which improved 18p to 1410.5p after it announced a partnership with China’s Hengrui Pharma to develop 12 medicines.
Ahead of results tomorrow, Barclays improved 3.9p to 364.4p and AstraZeneca lifted 72p to 10,874p.
On the fallers board, NatWest gave up a slice of Friday’s strong results-day performance with a decline of half a penny to 516.6p.
The FTSE 250 index rose 0.4% or 82.81 points to 22,200.79, with Aston Martin Lagonda among the strongest performers following a rise of 1.5p to 86.35p.
The shares of IT services group Computacenter slipped 309p to 2204p after it said its second quarter performance had been held back by softer trading in Germany and France amid temporary lower levels of public sector activity.
Pharma stocks higher in stronger FTSE 100, BT falls back
08:28 , Graeme EvansThe FTSE 100 index is up 0.4% or 34.37 points to 9154.68, while the Dax and Cac 40 have risen by about 1% in the wake of the US-EU trade deal.
Big risers in London include the marketing and advertising group WPP after a rise of 2% or 7.8p to 440.7p, with JD Sports Fashion up 1.6p to 94p.
GSK shares advanced 18.5p to 1411p after it announced a partnership with China’s Hengrui Pharma to develop 12 medicines. AstraZeneca lifted 86p to 10,888p.
On the fallers board, BT Group gave up some of last week’s strong performance with a decline of 3.6p to 219.1p.
Corporate earnings dominate week ahead
07:54 , Graeme EvansShell, Barclays, Rolls-Royce and BAE Systems are among a large number of FTSE 100 index companies due to report results this week.
The calendar also includes GSK, HSBC, Next, Unilever and British Airways owner IAG.
In the US, Microsoft and Meta Platforms are in the earnings spotlight on Wednesday evening before Apple and Amazon the following day.
The focus is also on the interest rate decision of the Federal Reserve on Wednesday, as well as the state of US-China trade negotiations ahead of Friday’s deadline.
Number of firms in critical distress up 21% on a year ago
07:35 , Graeme EvansAlmost 50,000 businesses are now in ‘critical’ financial distress, the quarterly Red Flag Alert report by business advisory firm Begbies Traynor revealed today.
The figure of 49,309 is 21.4% higher than a year ago and up 8.6% on the first quarter of the year.
Of the 22 sectors covered by the Red Flag Alert, all experienced an increase in ‘critical’ financial distress versus a year ago.
In consumer-facing industries, bars and restaurants rose 41.7%, travel and tourism by 39% and general retail by 17.8%.
Begbies Traynor executive chairman Ric Traynor said: “Small and medium sized businesses across the UK are being put under immense strain by the recent increases to employer’s NI as well as the increase to the national minimum wage.
“With limited financial headroom to absorb rising costs, many businesses are now reaching a tipping point.”
FTSE 100 seen higher, Asia stocks mixed
07:00 , Graeme EvansThe FTSE 100 index is set for a strong start to the week, with futures pointing to a rise of about 0.5% on the back of yesterday’s US-EU trade deal.
Frankfurt’s Dax and the Cac40 in Paris are seen opening more than 1% higher after the agreement included a 15% tariff on many European exports to the US, rather than the 30% previously threatened.
London’s top flight lost 18.06 points to close on Friday at 9120.31 but still recorded a fifth positive week in a row.
On Wall Street, the S&P index posted a record close for a fifth consecutive session after adding 0.4%.
Asia markets are mixed this morning after the Hang Seng index rose 0.4% but the Nikkei 225 fell 0.9%.
