(Alliance News) - The FTSE 100 closed higher on Monday, while the pound leapt, after reports that Donald Trump would not immediately impose tariffs upon his inauguration as US president.
The FTSE 100 index rose 15.32 points, 0.2%, at 8,520.54. It had earlier reached a new intra-day high of 8,548.59.
The FTSE 250 ended 110.68 points lower, 0.5%, at 20,486.74, and the AIM All-Share shed 0.78 of a point, 0.1%, at 718.29.
The Cboe UK 100 ended up 0.2% at 854.28 on Monday, the Cboe UK 250 declined 0.3% at 17,921.15, and the Cboe Small Companies fell 0.2% at 15,697.79.
In European equities on Monday, the CAC 40 in Paris ended 0.3% higher, while the DAX 40 in Frankfurt advanced 0.4%.
Financial markets in New York are closed on Monday for Martin Luther King Jr Day.
The pound was quoted higher at USD1.2298 late on Monday in London, compared to USD1.2189 at the equities close on Friday.
The euro firmed to USD1.0399 on Monday against USD1.0292 at the time of the European market close Friday. Against the yen, the dollar was trading lower at JPY155.69 compared to JPY156.34.
Dollar weakness came after the Wall Street Journal reported president-elect Donald Trump is to hold off imposing sweeping tariffs, at least for now.
XTB analyst Kathleen Brooks commented: "Reports this afternoon, suggest that the president won't implement a package of tariffs today, instead he is planning to sign a memo that will direct Federal agencies to evaluate US trade relationships with China, Mexico and Canada, in particular. It will also direct the agencies to investigate other US trade deficits and unfair trading practices. Conspicuous by their absence are actual tariffs, which suggests that a programme of tariffs is still under debate by Trump and his team."
The Financial Times supported the claims in the WSJ, stating that Trump is looking to evaluate America’s trade relationships with Canada, Mexico and China, but is shying away from any new import tariffs on imports.
Kathleen Brooks at XTB said the sharp moves in the forex market is a sign that the Trump's second term could trigger excess volatility in financial markets.
But she added Trump's policies linked to deregulation in the energy sector and the financial sector, are all positive for the FTSE 100.
"The UK index has a large energy sector, and Trump’s preference for hydrocarbons could boost UK oil majors. Added to this, UK regulators appear to be taking the lead from the US and will delay the implementation of Basel 3 rules to extend bank capital ratios. This has boosted the financial sector in the UK, and Barclays’ stock price has reached its highest level since 2010, while Lloyds Banking Group has also recouped losses from last year."
On London's FTSE 100, miners lead the risers on hopes that a softer tariff policy towards China would boost economic growth in the world's second largest economy.
Fresnillo rose 2.9%, Anglo American also firmed 2.9% and Glencore gained 1.9%.
National Grid rose 0.3% as Citi upgraded to 'buy' from 'neutral'.
"We upgrade National Grid... following a period of share price underperformance, mostly driven by macro factors and flows," Citi said in a research note.
National Grid shares are currently trading on an around 15% premium to its regulated asset base, which Citi believes presents an "attractive entry point" compared to long-term average of 30%.
"We see this as attractive proposition together with a sustainable and growing dividend offering [around] 5.0% yield," Citi said.
A drop in the oil price boosted airlines on hopes for lower fuel prices.
British Airways owner IAG rose 1.6%, budget airline easyJet climbed 0.6% and on the FTSE 250 Wizz Air firmed 1.8%.
Brent oil was quoted lower at USD79.69 a barrel from USD80.05 late Friday, boosted by the cease fire in the Middle East.
Also on the FTSE 250, John Wood advanced 2.8% after winning a "significant" new contract from Esso Australia to provide maintenance of onshore and offshore assets in Gippsland Basin in Victoria state.
Wood said the "long-term" contract starts this month and will create 250 jobs although it did not disclose the value of the deal.
Elsewhere, shares in Reach, which owns the Daily Mirror and Express newspapers, soared 21% after it raised its financial guidance for the year just past, following a "strong" fourth-quarter.
Reach said adjusted operating profit in 2024 is estimated to be above market consensus of GBP97.8 million, an average of published forecasts compiled by Reach. This would be up 1.3% from underlying adjusted profit of GBP96.5 million in 2023.
Among smaller caps, Pod Point plummeted 35%.
The electric vehicle charging network operator is forecasting an adjusted loss before interest, tax, depreciation and amortisation of approximately GBP14 million for 2024, in line with guidance.
However, it expects about GBP53 million in turnover, down from guidance of roughly GBP60 million, due to "ongoing weakness in the private new car segment of the EV market". Net cash at December 31 totalled GBP5.3 million, below guidance of around GBP15 million.
"The shares are trading at just a fraction of their listing price and the cash buffer the company has long enjoyed is being eroded," AJ Bell's Russ Mould commented. "This is partly a result of the shift from home charging, where Pod Point gets paid upfront, to charging points in other locations."
"The problem for the company is that the point at which it becomes cash flow positive is moving further into the distance and, like a motorist whose fuel or charge is becoming depleted, this is more uncomfortable when the company's money in the bank is draining away."
Gold was quoted lower at USD2,707.18 an ounce late in London on Monday against USD2,715.22 on Friday.
Tuesday's economic calendar has UK jobs and average earnings data at 0700 GMT and Canadian inflation figures at 1330 GMT.
The local corporate calendar has half-year results from construction firm Keir, and trading statements from pub operator Marston's, building materials company Marshalls and Homepride and Mr Kipling owner Premier Foods.
By Jeremy Cutler, Alliance News reporter
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