Trump victory would boost FTSE 100, claims Goldman

A NEW Donald Trump presidency would be likely to boost the FTSE 100 ahead of other global markets, Goldman Sachs analysts have said.

The Wall Street bank said the British market is one of the least exposed to turmoil in global trade, leaving it less vulnerable to a 10pc blanket tariff on US imports that has been proposed by the Republican presidential frontrunner.

Sharon Bell, European strategist at Goldman, added that Republican control of the White House would make it more likely that they will “also control the Congressional agenda”.

Goldman’s foreign exchange analysts believe a united government would most likely allow for greater spending, strengthening the dollar and benefiting European businesses that earn money in America.

In a note to clients, the investment bank said “defensive” markets like the FTSE 100 and Swiss stock exchange, which include more companies with stable dividends and steady growth such as utilities, would be most resilient. Goldman added: “For FTSE 100 companies, roughly half of dividends are paid in dollars.

“Moreover, greater fiscal expansion may add to US growth (although there is some prospect of higher rates offsetting a portion of this).” Mr Trump, who served as US president between 2017 and 2021, has built a commanding lead over Nikki Haley, his last Republican rival, after winning the presidential primary in New Hampshire.

By contrast, Goldman said European stocks on the Continent could be hit hard by a Trump presidency.

It said German stocks were the most exposed to the prospect of tariffs on exports to the US. About 15pc of US imports come from Europe. The note said: “In terms of a Republican/trump presidency, we would expect higher risks around both an increase in tariffs on Europe and a reduction in US funding/support for Ukraine.”

German stock indices are most vulnerable, Goldman said, with the country’s traditional national strength in industry, chemicals and carmaking all at risk. Analysts at Lombard Odier said the potential re-election of Mr Trump adds to the challenges already faced by Germany from the end of cheap Russian gas and the slowdown in China.

Samy Chaar, chief economist at the wealth manager, said: “If we get a second Trump administration, the America First mantra will come back to the fore. It certainly means tariffs for Europe and for Asia. It also means the US commitment to fund Ukraine or to support Nato will come under question.”