London stocks hit record high on tariff optimism ~ EconomyLens.com

London (AFP) – Stocks largely rose on Thursday, with London striking a record high, as investors remained optimistic that governments will reach deals to avoid US tariffs. The dollar climbed versus main rivals while oil prices slid. Bitcoin steadied after topping $112,000 for the first time on Wednesday.

Wall Street’s main indices wobbled in morning trading, a day after the S&P 500 and Nasdaq Composite set fresh highs thanks to a surge in US chip titan Nvidia that pushed the firm to a record $4 trillion valuation at one point. But as European markets closed, both the Dow and S&P 500 were in the green.

In Europe, London’s FTSE 100 index rose more than one percent to set a new all-time high, lifted also by a surge in mining stocks after US President Donald Trump said he would enact a 50-percent copper tariff on August 1. Paris stocks advanced, tracking gains in Asia, but Frankfurt ended the day lower.

“European markets in general continue to shrug off Donald Trump’s daily tariff updates, perhaps seeing them as noise and not facts,” said Dan Coatsworth, investment analyst at AJ Bell. “Trump is throwing out numbers left, right and centre, and investors have begun to dismiss anything that isn’t set in stone,” he added.

Negotiators from around the world have been trying to reach agreements with Washington since Trump in April unveiled his “Liberation Day” tariff bombshell, with a July 9 deadline pushed back to August 1. “Indications that the EU is edging closer to a deal with the US, with an agreement thought to be possible in a few days, has added to the positive vibes,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

The EU expects Trump to keep a 10-percent baseline tariff on EU goods with exemptions for critical sectors such as airplanes, spirits, and cosmetics. Letters have been sent in recent days to more than 20 trading partners — including Japan and South Korea — setting out new tolls, with some higher and some lower than the initial levels.

There was little global reaction to news that Trump had hit Brazil with a 50-percent tariff as he blasted the trial of the country’s ex-president Jair Bolsonaro. Brazilian President Luiz Inacio Lula da Silva said he would impose reciprocal levies on the United States. Brazil had not been among those threatened with higher duties, with the United States running a goods trade surplus with the South American giant.

Traders were given few guides on the US Federal Reserve’s interest rate plans after minutes published on Wednesday from its June policy meeting showed officials divided on the best way forward. While the board sees the president’s tariffs as inflationary, the minutes said there remained “considerable uncertainty” on the timing, size, and duration of the effects.

“There is an understanding that the tariffs could invite higher prices and worsening inflation, but the stock market and the Treasury market continue to operate with an attitude of ‘seeing is believing’,” said Briefing.com analyst Patrick O’Hare. “They haven’t seen enough in the hard data to be convinced that the inflation threat is coming to fruition,” he added.

– Key figures at around 1530 GMT –

New York – Dow: UP 0.6 percent at 44,732.82 points

New York – S&P 500: UP 0.2 percent at 6,278.04

New York – Nasdaq Composite: DOWN less than 0.1 percent at 20,596.43

London – FTSE 100: UP 1.2 percent at 8,975.96 (close)

Paris – CAC 40: UP 0.3 percent at 7,902.25 (close)

Frankfurt – DAX: DOWN 0.4 percent at 24,456.81 (close)

Tokyo – Nikkei 225: DOWN 0.4 percent at 39,646.36 (close)

Hong Kong – Hang Seng Index: UP 0.6 percent at 24,028.37 (close)

Shanghai – Composite: UP 0.5 percent at 3,509.68 (close)

Euro/dollar: DOWN at $1.1679 from $1.1719 on Wednesday

Pound/dollar: DOWN at $1.3558 from $1.3590