Citywire for Financial Professionals
Stay connected:

View the article online at http://citywire.co.uk/money/article/a1103537

FTSE falls as China reignites global trade war fears

Reports China is preparing to retaliate against US president Donald Trump's tariff plans weighs on stock markets.

 
FTSE falls as China reignites global trade war fears
 

The FTSE 100 has fallen as fears over a global trade war resurfaced with reports China was preparing to retaliate against US president Donald Trump's to impose tariffs on aluminium and steel imports.

The UK blue-chip index fell 35 points, or 0.5%, to 7,026, with other European markets were also down. France's CAC 40 fell 0.3% and Germany's DAX gave up gains to fell into the red, down 0.1%.

The Wall Street Journal reported China was planning tariffs aimed at Trump's support base, targeting US agricultural exports from 'farmbelt' states.

The FTSE 100 was also held back by a rally in the pound after data showed UK wage growth hitting its highest level in more than two years, strengthening the chances of an interest rate rise by the Bank of England in May.

Average weekly earnings excluding bonuses increased by 2.6% in the three months to January, and by 2.8% including bonuses. With inflation at 2.7%, wages are now close to registering real growth.

'That should make it easier for the Bank of England to raise interest rates from their current low level - almost certainly not this week but very likely in May,' said Tom Stevenson, investment director for personal investing at Fidelity International.

'Wage growth has been the missing link in Britain's long, slow recovery from the financial crisis. It is the key to unlocking a return to monetary normality.'

The news pushed the pound 0.4% higher against the dollar to $1.405. A stronger pound tends to hinder the FTSE 100, whose stocks rely on overseas markets for around three-quarters of their earnings.

On the FTSE 100, Kingfisher (KGF) was a heavy faller, down 8% at 310.8p as the owner of the B&Q and Screwfix home improvement chains warned the outlook for the UK retail market was 'more uncertain'.

Among 'mid-cap' stocks software group Sophos (SOPH) jumped 9% to 454.2p, recovering some ground from a two-day sell-off sparked by fears for the technology sector following the share price crash at Micro Focus (MCRO).

Close behind was the Woodford Patient Capital (WPCT ) trust, up 7.5% at 78.3p after top holding Prothena (PRTA.O) signed a deal with biotech giant Celgene (CELG.O) that could be worth more than $2.2 billion.

But another Neil Woodford stock, Softcat (SCTS), fell to the bottom of the index, down 12% at 598p as the IT infrastructure company, whose shares had nearly doubled over the last 12 months, succumbed to profit-taking after half-year results. The stock is a 2.2% holding in the Woodford Income Focus fund. 

Among 'small-cap' stocks, Moss Bros (MOSB) tumbled 21.5% to 46p as the clothing retailer issued a profit warning.

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

News sponsored by:

The Citywire Guide to Investment Trusts


In this guide to investment trusts, produced in association with Aberdeen Asset Management, we spoke to many of the leading experts in the field to find out more.

Watch Now

More about this:

Look up the funds

  • LF Woodford Income Focus A GBP Acc
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them

Look up the shares

  • Kingfisher PLC (KGF.L)
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Sophos Group PLC (SOPH.L)
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Micro Focus International PLC (MCRO.L)
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Softcat PLC (SCTS.L)
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Moss Bros Group PLC (MOSB.L)
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them

Look up the investment trusts

Look up the fund managers

  • Neil Woodford
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them

More from us

What others are saying

Archive

Today's articles

Tools from Citywire Money

From the Forums

+ Start a new discussion

Weekly email from The Lolly

Get simple, easy ways to make more from your money. Just enter your email address below

An error occured while subscribing your email. Please try again later.

Thank you for registering for your weekly newsletter from The Lolly.

Keep an eye out for us in your inbox, and please add noreply@emails.citywire.co.uk to your safe senders list so we don't get junked.

Read more...

FCA warns preference share issuers amid Aviva fallout

by Daniel Grote on Apr 19, 2018 at 08:51

Sorry, this link is not
quite ready yet