FTSE 100 Live: Japan Trade Deal Boosts Markets, Traders Released
Market Gains Driven by Japan-US Trade Deal
The FTSE 100 index continued its upward trend, reaching a new record as global markets reacted positively to the recent trade deal between Japan and the United States. This agreement, which includes a 15% tariff on Japanese exports to the U.S., has sparked optimism across various sectors, particularly in the automotive industry. Companies like Toyota and Mazda saw significant gains, with shares rising by 14% and 17%, respectively. The Nikkei 225 also surged by 3.5%, reflecting the positive sentiment.
In London, the FTSE 100 added another 0.6% to a fresh record of 9075.84, while benchmarks in Paris and Frankfurt rallied by 1%. The European markets were buoyed by hopes that a similar trade deal could be reached with the European Union. This optimism was further fueled by the announcement that Japan would invest $550 billion in the U.S., marking it as the largest permanent trade deal under the Trump administration.
Pharmaceutical stocks also benefited from the positive market environment. AstraZeneca and GSK saw their shares rise, with AstraZeneca gaining 3% to 10,628p and GSK increasing by 20p to 1367.5p. The success of these companies was attributed to the relief from potential tariffs that had been previously threatened by President Trump.
Strong Performance in Blue-Chip Stocks
Among the blue-chip stocks, Informa stood out as the best performer, rising 5% or 37.6p to 863.6p. This increase came after the company upgraded its full-year guidance following strong half-year results. Informa reported a 24% growth in adjusted operating profit and confirmed £150 million in additional share buybacks. The company's performance highlighted the positive impact of the trade deal on the broader market.
Other notable performers included JD Sports Fashion, which lifted 3%, and Ashtead, which added 122p to 4857p. These gains were driven by the overall positive sentiment in the market, which encouraged investors to take risks and seek higher returns.
Impact on Other Sectors
Not all sectors experienced gains. The FTSE 250 index saw some mixed results, with ASOS rising 8% and Breedon falling 7%. The construction materials business faced challenges, with Breedon warning that its full-year results will be at the low end of market forecasts. Despite this, broker Peel Hunt maintained its Buy recommendation for the company, citing its strong financial position.
JD Wetherspoon also saw a positive performance, with shares rising 4% to 808p. The pub chain reported a 5.1% increase in like-for-like sales during the final quarter of its financial year. The warm weather was cited as a key factor in boosting sales, with the company on track to meet its annual expectations in October.
Legal and Regulatory Developments
In addition to market movements, there were developments in the legal sphere. Two former traders involved in rate-rigging were found guilty of manipulating benchmark interest rates. However, their convictions were later quashed by the Supreme Court, raising questions about the legal process and the implications for future cases.
Heathrow Airport also faced scrutiny after a fire at an electricity substation caused a shutdown in March. The airport’s CEO stated that the cost of the disruption would be in the low double-digit millions of pounds. Heathrow is still considering legal action against National Grid, highlighting the ongoing challenges faced by the aviation sector.
Broader Implications of the Trade Deal
The Japan-US trade deal has far-reaching implications beyond just the stock market. It has the potential to boost economic growth in Japan by reducing trade barriers and encouraging investment. Analysts from UBS Global Wealth Management noted that the lower tariffs on autos could improve Japan’s real GDP growth by 0.4 percentage points in 2023 and again in 2026. This positive outlook has contributed to the overall bullish sentiment in the market.
As the markets continue to react to the trade deal, investors are closely watching for further developments. The potential for more trade agreements before the August deadline adds to the optimism, with futures markets pointing to gains in the Dax and Cac 40 indices.
Overall, the recent trade deal has provided a much-needed boost to the global markets, driving up stock prices and encouraging investor confidence. With the FTSE 100 reaching new records and other indices showing positive trends, the market seems poised for continued growth in the coming weeks.