London midday: Stocks gain on US-Japan trade hopes; Sino-US tensions escalate
By Michele Maatouk
Date: Tuesday 08 Apr 2025
(Sharecast News) - London stocks had extended gains by midday on Tuesday, recovering from whopping losses in the previous session despite escalating Sino-US tensions, as investors grew hopeful of a trade deal between the US and Japan.
The FTSE 100 was up 1.6% at 7,825.72, having closed down 4.4% on Monday amid the Trump tariff selloff.
The gains came despite escalating tensions between the US and China, after the latter said it would "fight to the end" as Washington threatened an additional 50% tariff if Beijing went ahead with retaliatory measures of its own against American imports.
US President Donald Trump made the threat late on Monday, a move described as "a mistake on top of a mistake, which once again exposes the US's blackmailing nature", Agence France-Presse quoted a Commerce Ministry spokesperson as saying on Tuesday.
"China will never accept this. If the US insists on going its own way, China will fight it to the end. If the US escalates its tariff measures, China will resolutely take countermeasures to safeguard its own rights and interests."
Sentiment got a boost after it emerged that Japan was set to get priority in US tariff talks, which are due to begin in a few days.
Overall, however, market commentators questioned whether the advance in markets was little more than a 'dead cat bounce' - a brief recovery following heavy losses, derived from the idea that even a dead cat will bounce if it falls from a great height.
Kathleen Brooks, research director at XTB, said: "Markets are in a cautiously optimistic mood on Tuesday after wild swings on an historic Monday for risk assets. US stock markets fell modestly, although the Nasdaq managed eke out a gain, as Nvidia rose more than 3%, and the Magnificent 7 group of tech stocks managed to reverse earlier losses.
"Does this mean the selloff is over? We don't think so, instead, we think that this is what real tariff fatigue looks like."
Richard Hunter, head of markets at Interactive Investor, said it was "far too early to say whether the reduced market falls represent an inflection point, or whether they are simply a classic dead cat bounce".
He continued: "The volatility within the US trading session in particular suggest that either is possible, especially since further tariff announcements will follow which could move sentiment in either direction.
"Indeed, many investors have noted - with some exasperation - that unlike previous crises where a confluence of factors came together to cause extreme market weakness, this set of events is largely due to the actions of just one person.
"To some extent, global indices are at the mercy of the President, and the growing backlash which the US is beginning to experience in terms of retaliatory tariffs and increasingly aggressive rhetoric are not even near the end of the beginning."
In equity markets, engine maker Rolls-Royce, BAE Systems and Babcock were the top risers on the FTSE 100 after Trump said in a White House announcement on Monday that his administration had approved a defence budget of around $1 trillion.
Scottish Mortgage Investment Trust - which is heavily exposed to the US tech sector - was also a high riser.
Hilton Foods was in focus as it said it was on track to deliver 2025 earnings in line with guidance after a sharp jump in profits last year, driven by its core retail meat business which outperformed total market growth in every region.
The company posted a 25% rise in pre-tax earnings to £61m and hiked its dividend 7.8% to 34.5p.
Elsewhere, Howden Joinery announced that its chief financial officer was set to step down and be replaced by Coats Group's Jackie Callaway. Paul Hayes, 58, will retire as finance chief and from the board at the end of May, following five years in the role.
Recruiter Hays jumped after an upgrade to 'equalweight' at Morgan Stanley. The bank previously had an 'underweight' rating on the shares as it saw risk from Hays' large exposure to Germany combined with a weaker balance sheet and higher likelihood of a dividend cut.
"While these risks remain, we think they are now better reflected in the valuation, and our price target implies limited further downside," it said. "We therefore neutralise our rating."
Market Movers
FTSE 100 (UKX) 7,825.72 1.61%
FTSE 250 (MCX) 18,211.42 2.51%
techMARK (TASX) 4,265.28 2.20%
FTSE 100 - Risers
Rolls-Royce Holdings (RR.) 673.80p 5.98%
International Consolidated Airlines Group SA (CDI) (IAG) 237.00p 5.61%
BAE Systems (BA.) 1,576.50p 5.28%
Babcock International Group (BAB) 687.50p 4.88%
Scottish Mortgage Inv Trust (SMT) 849.60p 4.22%
Games Workshop Group (GAW) 12,930.00p 4.19%
Flutter Entertainment (DI) (FLTR) 16,815.00p 4.05%
Ashtead Group (AHT) 3,792.00p 3.63%
London Stock Exchange Group (LSEG) 10,670.00p 3.34%
M&G (MNG) 178.55p 3.33%
FTSE 100 - Fallers
BT Group (BT.A) 151.70p -2.88%
Standard Chartered (STAN) 922.60p -1.56%
HSBC Holdings (HSBA) 728.60p -1.25%
Prudential (PRU) 707.20p -1.04%
Convatec Group (CTEC) 235.60p -0.34%
Kingfisher (KGF) 247.70p -0.28%
Sainsbury (J) (SBRY) 232.60p -0.26%
Vodafone Group (VOD) 65.06p -0.25%
Marks & Spencer Group (MKS) 357.90p -0.11%
WPP (WPP) 510.40p -0.08%
FTSE 250 - Risers
ICG Enterprise Trust (ICGT) 1,170.00p 9.35%
Oxford Nanopore Technologies (ONT) 105.20p 6.91%
HGCapital Trust (HGT) 480.50p 5.95%
Deliveroo Class (ROO) 119.80p 5.92%
Bellevue Healthcare Trust (Red) (BBH) 117.80p 5.56%
BlackRock World Mining Trust (BRWM) 429.00p 5.54%
Vistry Group (VTY) 539.00p 5.52%
Pantheon International (PIN) 281.50p 5.43%
Carnival (CCL) 1,195.00p 5.38%
Allianz Technology Trust (ATT) 323.50p 5.37%
FTSE 250 - Fallers
JTC (JTC) 774.00p -3.97%
Ruffer Investment Company Ltd Red PTG Pref Shares (RICA) 285.50p -2.73%
VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 382.00p -2.30%
Schroder Oriental Income Fund Ltd. (SOI) 244.00p -1.01%
Dr. Martens (DOCS) 47.06p -0.97%
Aston Martin Lagonda Global Holdings (AML) 59.85p -0.75%
Currys (CURY) 94.45p -0.58%
Diversified Energy Company (DEC) 878.00p -0.51%
Hilton Food Group (HFG) 851.00p 0.00%
W.A.G Payment Solutions (WPS) 62.00p 0.00%
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