Investors hunt bargains as FTSE 100 soars on tariffs relief
Trump’s tariffs pause has fired up the FTSE 100 index, although for some leading stocks there’s still a long way back. Graeme Evans reports on the big movers.
10th April 2025 13:35
by Graeme Evans from interactive investor
A burst of bargain hunting today fuelled the best day for the FTSE 100 index in five years but still left BP (LSE:BP.), Glencore (LSE:GLEN) and HSBC Holdings (LSE:HSBA) 10% or more short of where they were just over a week ago.
Donald Trump’s decision to defer the worst of his reciprocal tariffs until the summer gave the FTSE 100 a foothold back at 8000, having fallen by about 1,000 points to 7606 in the week following his Liberation Day announcement.
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The number one target for investors during today’s relief rally was Barclays (LSE:BARC), which jumped by as much as 25% in early dealings before settling 26.45p higher at 268.1p.
The lender, which has significant exposure to the US economy, is still about 9% cheaper than before the sell-off started. It fell as far as 228.7p on Monday morning as the shares threatened to completely unwind the advance from 200p to 316p seen in the past year.
About a dozen stocks were up by double-digit percentages within the first hour of today’s session, including Melrose Industries (LSE:MRO) and the airlines group International Consolidated Airlines Group SA (LSE:IAG) as the FTSE 100 initially surged by 6.2%.
The number of double-digit risers then faded on expectations of a weaker opening on Wall Street, albeit with about 60 stocks still registering gains of 5% or more by lunchtime. They included Rolls-Royce Holdings (LSE:RR.) and NatWest Group (LSE:NWG).
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The cooling of enthusiasm reflected the ongoing US-China trade war and uncertain outlook for inflation, growth and interest rates as negotiations with other countries continue.
Deutsche Bank said that the remaining 10% minimum universal tariffs imposed by the White House still represented the largest increase in decades.
It added: “Perhaps most crucially, we are currently still on course for a disorderly economic decoupling between the world’s two largest economies, with no immediate signs of either US or China backing down.”
This week’s escalation of the US-China trade war has increased the US effective tariff rate to 27% versus 9% prior to 2 April. Excluding trade with China, the rate is 11%.
UBS said: “Our base case (50% probability) has been for higher tariffs in the near term, followed by gradual rollbacks as political, business, and legal challenges mount, trading partners offer concessions, and/or as popular support for the Trump administration falls.”
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The 90-day reprieve last night caused the S&P 500 index to jump 9.5% in its third-best percentage performance since 1939, with only nine stocks in negative territory.
The tech-focused Nasdaq Composite bounced 12%, while NVIDIA Corp (NASDAQ:NVDA) shares lifted 19%, Apple Inc (NASDAQ:AAPL) put back 15% and Tesla Inc (NASDAQ:TSLA) surged 23%.
Their gains led to much improved sessions for Polar Capital Technology Ord (LSE:PCT), Pershing Square Holdings Ord (LSE:PSH) and Scottish Mortgage Ord (LSE:SMT) Investment Trust.
Other risers included Standard Chartered (LSE:STAN), although an improved price of 943.8p still leaves the Asia-focused lender some 18% lower as the worst-hit stock since 2 April.
HSBC is down by 15% in the face of uncertainty over the Chinese and wider Asia economy, with Prudential (LSE:PRU) investors also sitting on a fall of about 11%.
Recent heavy falls in commodity prices including copper also continued to weigh on valuations in the mining sector, with Glencore and Anglo American (LSE:AAL) still more than 10% lower despite improved trading today.
A modest recovery in the price of Brent crude to about $63.50 a barrel helped BP recover some ground today, but the stock remains at three-year low near 355p. It is about 18% cheaper than before the US tariffs announcement, compared with 14% for Shell (LSE:SHEL).
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