Stock markets start to recover as Trump pulls back China tech investment threats
London’s blue chip index ended the day up more than 1.1%.
Global stocks started to recover after Donald Trump’s administration pulled back from plans to restrict Chinese investment in US tech companies.
The FTSE 100 made notable gains, ending the day up 1.1% or 83.77 points at 7,621.69, while the French CAC 40 and the German DAX rose around 0.9% each.
The sentiment was also starting to lift US stocks, with the Dow Jones Industrial Average and S&P 500 rising 0.8% and 0.5% in early trading.
Connor Campbell, a financial analyst at SpreadEx, said: “Firmly strapped into the trade war rollercoaster, the markets saw a chunky upswing on Wednesday afternoon as Trump appeared to pull back from the brink (if only on one of the many issues between the US and China).
“Initially reported over the weekend as a severe, specific restriction on Chinese firms investing in US tech companies, Trump instead said that he would be expanding the authority of the Committee on Foreign Investment in the United States.
“And though that likely will involve CFIUS cracking down on certain Chinese investments, the fact that China itself wasn’t solely targeted appears to have sent a wave of relief through the markets.”
That relief helped lift the dollar, sending the pound down 0.6% against the greenback to trade at 1.314.
Sterling fell 0.1% versus the euro to 1.133.
Brent crude prices shot up 1.8% to 77.99 US dollars per barrel after US data showed a larger than expected decline in American oil stockpiles, though gas reserves were broadly in line with estimates.
In UK stocks, Whitbread shares were among the best performers on the FTSE 100, rising 134p to 4,027p after reporting a 3.2% rise in total sales in the first quarter.
That was helped by a 4.9% jump in its Costa Coffee business, while the Premier Inn hotels chain logged a 2.2% rise in sales.
ITV fell 1.2p to 174.7p after the broadcaster announced that Ian Griffiths, the firm’s chief operating officer and group finance director, will step down in the next year.
Mr Griffiths has been at ITV since September 2008, and has been credited with leading a turnaround at the company.
Away from the top tier, IWG slumped 9.1p to 315.1p after the workspace provider said its UK business “is not performing to management expectations”, adding that an acceleration of growth will weigh on the firm in the form of increased costs.
As a result, IWG said operating profit for 2018 is expected to be below previous expectations of between £15 million and £20 million.
Fastjet plunged 12.1p to 3.4p as the struggling budget airline warned that it is at risk of going bust unless it secures emergency funding.
The company, which offers budget flights across a number of African countries, said it is in “active discussions” with major shareholders regarding a potential equity fundraising, but said that in the absence of fresh cash “the group is at risk of not being able to continue trading as a going concern”.
The biggest risers on the FTSE 100 were Micro Focus International up 59p at 1,323p, Ocado Group up 40p at 1,061p, Whitbread up 134p at 4,027p, and Rolls-Royce Holdings up 31.2p at 961.2p.
The biggest fallers on the FTSE 100 were Just Eat down 57.8p at 755.2p, Bunzl down 30p at 2,262p, Royal Bank of Scotland down 2.8p at 254.8p, and Old Mutual down 1.5p at 156.5p.