10th Jul 2025 08:53
(Alliance News) - European equities opened higher on Thursday, with blue-chip benchmarks in London and Frankfurt hitting record highs, on EU-US trade deal optimism.
The FTSE 100 index surged 85.47 points, 1.0%, to 8,952.49, a new record high. The FTSE 250 was up 48.45 points, 0.2%, at 21,616.31, and the AIM All-Share was up 0.77 of a point, 0.1%, at 771.20.
The Cboe UK 100 was up 0.9% at 892.57, the Cboe UK 250 added 0.2% at 19,091.81, but the Cboe Small Companies gave back 0.2% to 17,459.05.
In European equities on Thursday, the CAC 40 in Paris rose 0.6%, while the DAX 40 in Frankfurt rose 0.2%. The DAX also hit a record high on Thursday, at one point trading at 24,639.10 points.
Supporting the FTSE 100's ascent on Thursday were miners, with Anglo American surging 4.8%, Rio Tinto rising 3.9% and Glencore adding 3.7%. Away from the FTSE 100, BHP joined in on the mining rally, climbing 3.7%.
The FTSE 100's closing high of 8,884.92 points was set around this time last month. It looks set to top that on Thursday.
Hope of a US-EU trade deal has support European equities. The EU wants to strike a deal with the US "in the coming days" to avoid sweeping tariffs, a spokesman said Wednesday.
The pound was quoted at USD1.3614 early Thursday, rising from USD1.3583 at the time of the London equities close on Wednesday. The euro stood at USD1.1733, climbing from USD1.1706. Against the yen, the dollar was trading lower at JPY146.21 from JPY146.53.
In Tokyo on Thursday, the Nikkei 225 lost 0.4%. In China, the Shanghai Composite was up 0.5%, while the Hang Seng Index in Hong Kong traded 0.8% higher. In Sydney, the S&P/ASX 200 ended up 0.6%.
President Donald Trump announced Wednesday that a 50% tariff on US imports of copper, a key metal for green energy and other technologies, will take effect on August 1.
"I am announcing a 50% TARIFF on Copper, effective August 1, 2025, after receiving a robust NATIONAL SECURITY ASSESSMENT," Trump posted on his Truth Social platform, likely alluding to a Department of Commerce investigation launched earlier this year.
Trump announced plans Wednesday to slap a 50% US tariff on Brazilian goods starting August 1, blasting the trial of the country's ex-leader Jair Bolsonaro as a "Witch Hunt."
In a letter addressed to President Luiz Inacio Lula da Silva, Trump criticised the treatment of Bolsonaro as an "international disgrace," adding that the trial "should not be taking place."
In addition, Trump released a fresh set of letters to trading partners Wednesday, setting out tariff rates for six countries as Washington pushes to bring about a flurry of trade deals officials have promised.
The letters, addressed to leaders of economies including the Philippines, Brunei, Algeria, Libya and Iraq, spelled out duties ranging from 20% to 30%.
"So, the tariff-reveal letters kept coming in yesterday — in alphabetical order — and they didn't look enchanting, to say the least. Exports from Algeria, Libya, Iraq, and Sri Lanka will be subject to 30% levies. Brunei and Moldovan exporters will pay 25%, while Brazilian exports will be hit with a hefty 50% tariff. So far, tariff rates range between 25% and 50% — except for the UK, which managed to pull a relatively modest 10%, while the EU is still waiting for its verdict. The latest reports suggest that European tariffs could be higher than the UK's 10%, but markets simply don't care," Swissquote analyst Ipek Ozkardeskaya commented.
"It's all tariffs, tension, and chaos — but markets have an extraordinary capacity to adapt. Trade developments are quickly becoming the new normal; they no longer hammer sentiment the way they once did. What could jolt markets is when all this starts showing up in the data — through slower growth or higher inflation. Until then, the music plays on."
The yield on the US 10-year Treasury was quoted at 4.34% early Thursday UK time, slimming from 4.38% at the time of the London equities close on Wednesday. The yield on the US 30-year Treasury was quoted at 4.88%, easing from 4.91%.
In New York on Wednesday, the Dow Jones Industrial Average ended up 0.5%, the S&P 500 rose 0.6% and the Nasdaq Composite climbed 0.9%.
Nvidia was the star of the show stateside ending 1.8% higher to give it a market value of USD3.97 trillion. The chipmaker did, however, top the USD4 billion valuation mark at one point on Wednesday.
Deutsche Bank analysts commented: "So for everything else that's happening right now, from tariffs to fiscal fears, AI is the great hope for US exceptionalism to return."
Minutes from the Federal Open Market Committee's June meeting showed policymakers believed tariff risks had moderated since its rate decision in May, but "considerable uncertainty" remains as to the timing and extent of their impact.
"While a few participants noted that tariffs would lead to a one-time increase in prices and would not affect longer-term inflation expectations, most participants noted the risk that tariffs could have more persistent effects on inflation, and some highlighted the fact that such persistence could also affect inflation expectations," the minutes noted.
However, the committee said "uncertainty had diminished" since the previous meeting, due to easing trade tensions.
Meeting minutes showed most Fed officials are disposed to cut rates this year, "noting that upward pressure on inflation from tariffs may be temporary or modest, that medium- and longer-term inflation expectations had remained well anchored, or that some weakening of economic activity and labour market conditions could occur."
Analysts at Barclays commented: "The minutes of the June FOMC meeting reaffirm that participants are in no rush to adjust policy rates, even if 'most' judged a rate cut would likely be appropriate this year."
Back in London, Jupiter Fund Management added 10%, the best of the 250s, as it unveiled a GBP100 million deal to acquire CCLA Investment Management.
CCLA is the UK's largest asset manager focused on serving non-profit organisations, Jupiter noted. CCLA has GBP15 billion in assets under management on behalf of charities, religious institutions and local authorities.
"The acquisition is highly compelling from strategic, cultural and financial perspectives, delivering progress against multiple objectives," Jupiter said.
"The acquisition marks a significant step forward in delivering on Jupiter's key strategic objective of increasing scale, specifically within its home market of the UK. It also opens up a new client channel and provides complementary investment expertise with a high degree of cultural alignment."
Grafton fell 7.6%. The building materials distributor and do-it-yourself retailer reported trading momentum "eased from mid-May and into June".
Grafton said it traded in line with expectations in the first half of the year, with revenue 10% higher at GBP1.25 billion from GBP1.15 billion 12 months prior.
"Group revenue reflects six months of trading from Salvador Escoda in Spain, which was acquired on 30 October 2024, and one month's trading from the acquisition of HSS Hire Ireland, which completed on 31 May 2025. All our businesses had one fewer trading days compared to the same period in the prior year, except for the Netherlands, Spain and Finland, which each had two fewer trading days," it added.
"Following a slow start to the year, trading activity gained momentum but eased from mid-May and into June, coinciding with a spike in global uncertainties which may have impacted customer confidence. We will continue to closely monitor trading patterns over the summer months."
Elsewhere, Macfarlane fell 11%. The packaging firm now expects adjusted operating profit to fall 10% in 2025, a year of "challenge and economic uncertainty".
"Distribution is experiencing weaker than expected demand, delays in new business decision making, pressure on gross margin due to the competitive environment, rising input prices and slower than anticipated recovery of labour and property-related cost increases," it said.
"Manufacturing Operations is performing robustly with good momentum with our aerospace and defence related customers and the benefit of the Polyformes acquisition, marginally offset by the slowdown in those sectors where customers are being impacted by uncertainty over US tariffs."
Still to come on Thursday is a US initial jobless claims reading at 1330 BST.
By Eric Cunha, Alliance News news editor
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