The UK benchmark index looks set to open in the red this morning, tracking the US and Asia lower. Shares around the world have come under pressure with the trade tensions between the US and China intensifying.
FTSE 100 seen lower
CNBC reports that according to IG, the FTSE 100 is seen opening 32 points lower at 7,597. The blue-chip index looks set to take cues from the US, where stocks fell last night in the wake of President Donald Trump’s announcement last week that the country would impose tariffs impacting up to $50 billion worth of Chinese goods, while Beijing retaliated with its own duties on US goods. China’s move prompted the US President to warn of a further 10-percent tariff on $200 billion of Chinese goods.
Stocks “may continue to zig and zag through the summer as the Jekyll and Hyde sides of Trump struggle to dominate his persona,” Ed Yardeni, president and chief investment strategist at Yardeni Research, said in a note, as quoted by CNBC. “On the one hand, there’s Trump, the Deregulator and Tax-Cutter – his benevolent Dr Jekyll persona. On the other is Trump, the Protectionist – his dark Mr Hyde.”
Asian shares meanwhile have retreated this morning, tracking the US lower. Kota Hirayama, senior emerging markets economist at SMBC Nikko Securities in Tokyo, told Reuters that Trump appeared “to be employing a similar tactic he used with North Korea, by blustering first in order to gain an advantage in negotiations. The problem is, such a tactic is unlikely to work with China.”
In the UK, the FTSE 100 closed little changed yesterday, shedding 2.58 points to close 0.03 percent lower at 7,631.33, with a weaker pound helping limit the index’s losses.
There are no major macroeconomic releases out of Europe to provide further direction to the market this morning. On the other side of the Atlantic, the US housing starts and building permits for May will be announced at 13:30 BST. On the corporate front, Ashtead (LON:AHT) will update investors on its recent performance this morning.