FTSE 100 tariff recovery: Barclays and NatWest outshine BP

A FTSE 100 recovery powered by Barclays (LSE:BARC) and NatWest Group (LSE:NWG) has almost entirely missed out BP (LSE:BP.) and Shell (LSE:SHEL) and left Glencore (LSE:GLEN) and HSBC Holdings (LSE:HSBA) shares with much ground still to make up.

The blue-chip index is 7% or 550 points higher across four sessions, having slid by 1000 points or 11% from 8600 during one of the most tumultuous periods of recent stock market history.

Learn with ii: How to become an ISA millionaire | ISA Investment Ideas | Top UK Shares

Since Donald Trump’s Liberation Day announcement on 2 April, a 90-day pause on the worst of the reciprocal tariffs and planned temporary exemptions on levies for consumer electronics and car makers have reduced some of the fear factor for investors.

Boosted by this apparent softening in White House approach, the S&P 500 index started today’s session 4.7% below its level at the tariff announcement and 12% off its mid-February peak.

Deutsche Bank points out that this is short of a normal recession reverse or some of the larger non-recession bear markets of recent years such as 2022, which saw a 25% peak-to-trough fall.

Volatility as measured by the Vix index has also taken a step back to its lowest level since 3 April, although the outlook for the US assets has kept the dollar index at a three-year low.

• Aviva shares receive further backing from City experts
• eyeQ: a stock that’s now in cheap territory
• Insider: bosses pump over £2m into this high-profile stock

Oil prices have also remained under pressure as demand forecasts continue to be impacted by a US-China trade war. Brent crude futures today remained below $65 a barrel, some $10 below where the benchmark stood at the start of April.

BP, which lost a fifth of its value as one of the worst-performing FTSE 100 stocks during the initial market turmoil, has struggled to regain ground due to fears that the lower oil price will force another cut to its share buyback programme.

It only reset its financial framework at the end of February, when it announced plans for a buyback worth between $750 million and $1 billion alongside first-quarter results.

That compared with the $1.75 billion announced with fourth-quarter results, a figure many in the City viewed at the time as unsustainable given net debt of $23 billion.

UBS now factors a figure of $500 million from the second quarter, with the risks skewed to the downside.

It said: “Even before the introduction of tariffs, BP’s net debt was set to go up before it goes down and the company is more exposed to the US economy through its downstream operations.”

The bank last week removed its Buy recommendation and cut its price target to 400p, which compares with today’s level of 347.9p at near a three-year low.

Shell, which prior to the market turmoil was regarded as one of Europe’s Big Oil stocks most likely to sustain shareholder distributions, has also struggled to regain ground. It is up 3% in the past four sessions, having fallen by 17% in wake of the tariffs announcement.

The performance of commodities has been sharply divergent, with the price of gold at a record $3,220 an ounce sufficient to make Endeavour Mining (LSE:EDV) and Fresnillo (LSE:FRES) the best-performing stocks during the recent FTSE 100 recovery.

• Stockwatch: why I rate this exciting gold share a buy
• Gold investing: what, why and how to invest
• ii view: JP Morgan beats forecasts but cautions on trade war

They have risen 15.8% and 19% respectively, which compares with Anglo American (LSE:AAL) as the next best miner. Its shares are up 13.5%, having earlier fallen 17.9% on fears over the impact of the recent events on its divestment programme.

Glencore slumped to a four-year low after a 15.8% reverse but has since put back 8% amid slightly improved expectations for the price of key commodities including coal.

Other risers have included Standard Chartered (LSE:STAN), having initially slumped by a FTSE 100-leading 23.7% due to the severity of the tariffs faced by a number of major Asia economies. Trump’s reprieve until the summer has helped the shares rebound 15%, despite an escalation of US-China tariffs.

HSBC fell 19% to its lowest level but has since put back 9%. The pace of recovery has been stronger for Barclays after momentum benefited from the read-across to JPMorgan Chase & Co (NYSE:JPM) and other early reporters in the Wall Street earnings season.

The lender, which has significant exposure to the US economy, initially fell 18.6% before a recovery of 13.8% back to 279p.

NatWest is near to where it stood prior to the sell-off - one of about 25 stocks up by 10% or more since Wednesday. They also include Legal & General Group (LSE:LGEN), BT Group (LSE:BT.A) and Games Workshop Group (LSE:GAW).