14th Apr 2025 16:57
(Alliance News) - The FTSE 100 climbed on Monday, while the pound rose, amid hopes for a softer policy on tariffs from the US.
The FTSE 100 index rose 170.16 points, 2.1%, at 8,134.34. The FTSE 250 jumped 463.66 points, 2.5%, at 18,978.51, and the AIM All-Share advanced 11.19 points, 1.7%, at 659.02.
The Cboe UK 100 rose 2.1% at 809.34, the Cboe UK 250 firmed 2.7% at 16,489.66, and the Cboe Small Companies added 0.8% at 14,926.69.
In Paris, the CAC 40 leapt 2.3%, while Frankfurt's DAX 40 jumped 2.9%.
Equities benefited from a reprieve on tariffs on smartphones, PCs, servers and other technology imported from China for a two-month period, announced in the US late Friday.
But on Sunday, US president Donald Trump stressed the reprieve was "temporary" and part of the longstanding plan to apply a different, specific levy to the sector.
"Nobody is getting 'off the hook'," Trump said in a social media post Sunday, adding the exempted products are "just moving to a different tariff 'bucket'" and that the administration will be "taking a look at semiconductors and the whole electronics supply supply chain."
But Michael Brown, strategist at Pepperstone, said he retains a preference for "rally selling, for the time being at least, especially given the elevated degree of uncertainty which persists, and which seems unlikely to dissipate any time soon."
He said "the incoherence with which economic policy is being made, coupled with the credibility erosion caused by President Trump’s constant U-turns and 'governing by tweet' modus operandi, is clearly creating more than a few jitters. Fundamentally, even though the ridiculous 'reciprocal' tariffs have been paused (for now), the prospect of those levies being imposed again will continue to linger."
The latest US tariff about-turn failed to support the dollar.
The pound was quoted higher at USD1.3183 late on Monday in London, compared to USD1.3057 at the equities close on Friday. Against the yen, the dollar was trading lower at JPY143.21 compared to JPY143.46.
The euro stood higher at USD1.1375 against USD1.1339.
Morgan Stanley recommends long EUR/USD positions, even after the recent rally.
"We think the narrative has durably changed on the global outlook, and USD-negative flows are likely to boost EUR to 1.20", the investment bank said.
The bank sees room for investors to continue shifting exposure towards the euro and the yen at the dollar's expense.
On Wall Street, at the time of the London close, the Dow Jones Industrial Average traded 0.7% higher, the S&P 500 up 0.9%, and the Nasdaq Composite rose 0.8%.
Goldman Sachs rose 1.6% after strong trading results helped the bank deliver better-than-expected first quarter results.
The New York-based financial services company said net earnings in the first quarter of 2025 increased 15% to USD4.74 billion from USD4.13 billion a year earlier. Basic earnings per share climbed 22% to USD14.25 from USD11.67 a year ago.
Net revenue improved 6.0% to USD15.06 billion from USD14.21 billion.
Chief Executive Officer David Solomon told the bank's earnings call that the prospect of a US recession has increased and businesses were being constrained by the uncertain path of policy.
"Uncertainty around the path forward and fears over the potentially escalating effects of a trade war have created material risks to the US and global economy," he stated.
But he added the bank is still seeing "significant" activity levels.
On the FTSE 100, gains were broad-based led by US-exposed lender Barclays, up 4.8%.
Wealth management firm St James's Place rose 3.0%, grocer J Sainsbury firmed 4.0%, insurer Prudential advanced 3.4% and airline easyJet climbed 3.7%.
ConvaTec rose 4.6% after a delay to proposed Medicare changes in the US was viewed as providing "short-term" relief.
Late Friday, the US Centers for Medicare & Medicaid Services postponed Local Coverage Determinations for skin substitute grafts/cellular and tissue-based products for the treatment of diabetic foot ulcers and venous leg ulcers.
As a result, ConvaTec, the London-based medical products and technologies company said it now expects sales of wound dressing treatment InnovaMatrix of around USD75 million in financial 2025, up from USD50 million previously forecast.
Jefferies said the decision provides "short-term relief", while "some may view it as an early sign that the local coverage determinations might be pulled altogether".
Under the planned LCDs, Convatec's InnovaMatrix would not be covered by Medicare for DFU/VLU treatments.
On the FTSE 250, Ashmore fell 6.4% after reporting a drop in assets under management in its financial third quarter, as institutional redemptions in local currency strategies offset positive investment performance.
The London-based investment manager said assets under management fell 5.3% to USD46.2 billion as at March 31 from USD48.8 billion at December 31.
The USD2.6 billion decrease reflected net outflows of USD3.9 billion, partially offset by positive investment returns of USD1.3 billion.
But John Wood jumped 4.4% after revealing terms of a bid approach from Sidara.
The Aberdeen-based oilfield and engineering services said Sidara plans a USD450 million capital injection into the company, alongside the proposed 35 pence per share cash bid.
John Wood said it would be "minded to accept" a bid on those terms.
John Wood has had a turbulent few months with a review into the business finding "material weaknesses and failures" in the "financial culture" of its Projects division.
As a result of the review, John Wood said it expects to make a number of prior year adjustments to the income statement and balance sheet, within the division.
Talks between the two firms broke down last year after Sidara made a series of attempts to buy John Wood. Sidara's final tilt, priced at around 230p per share, valued John Wood at GBP1.58 billion.
AJ Bell's Russ Mould said it would be a " pretty sorry end" for John Wood.
"This feels very small beer compared with the 230p on the table before Sidara walked away from a deal last summer but beggars cannot be choosers and such is Wood Group’s perilous position it has little choice but to accept what is on offer, particularly given Sidara is pitching a potential capital injection as part of the agreement," he added.
Brent oil was quoted higher late in London on Monday, at USD63.43 a barrel from USD63.43 late Friday. Gold was quoted higher at USD3,239.41 an ounce against USD3,239.41.
Brent oil was quoted higher late in London on Monday, at USD64.83 a barrel from USD63.43 late Friday. Gold was quoted lower at USD3,207.11 an ounce against USD3,239.41.
Both Goldman Sachs and UBS think the price of the yellow metal could rise further despite hitting an all-time high on Friday.
Goldman has raised its year-end gold forecast to USD3,700 per ounce from USD3,300 before, with a projected range of USD3,650 to USD3,950 per ounce.
UBS increased its base case forecast for gold to USD3,500 per ounce from USD3,200 previously.
Tuesday's global economic calendar sees Canadian CPI figures, eurozone industrial production data and UK unemployment and average earnings data.
By Jeremy Cutler, Alliance News reporter
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