MARKET REPORT
THE London markets closed lower yesterday after tweets from Donald Trump warning China of trade retaliation more than counteracted positive comments from the Federal Reserve chairman.
The FTSE 100 closed 33.2 points lower at 7,094.98 at the end of trading.
The European markets were lifted by Jerome Powell’s positive comments but slumped as traders were spooked by the president’s war of words with China.
Mr Trump’s warning of retaliation came after China announced plans to hit some US goods with significant tariffs.
Connor Campbell, financial analyst at Spreadex, said: “The markets went a bit haywire on Friday afternoon, flip-flopping all over the place as they tried to process both China’s latest retaliatory measures and Jerome Powell’s headline speech at the Jackson Hole Symposium.
“Initially the European and US indices tanked as news came in that Beijing was slapping tariffs of 5% to 10% on 75 billion dollars (£61bn) of US products, with the list of items including crude oil, small aircraft and cars.
“However, the start of Powell’s speech in Jackson Hole – which was gazumped by the China announcement – appeared to somewhat calm those choppy waters.”
The European markets dropped sharply before the close to sit firmly in the red. The German Dax fell by 1.15% while the French Cac moved 1.14% lower.
Sterling made a slight gain against the dollar but suffered against the euro amid fear of global trade tensions. The pound was 0.04% up at 1.224 versus the US dollar and down against the euro at 1.099.
In stocks, Entertainment One soared after it was revealed US toy company Hasbro has agreed a deal to buy the Peppa Pig owner for £3.3bn. Shares jumped 141.6p to 585p.
Elsewhere, Eddie Stobart put on its brakes and suspended the trading of its shares on the back of an accounting review which is expected to affect its earnings for the first half of the year.
The transport company’s chief executive Alex Laffey also announced his immediate departure from the firm and will be replaced by Sebastien Desreumaux.
Royal Bank of Scotland shares remained fairly flat despite the competition watchdog warning the bank to fix its PPI processes, alongside rival Santander. According to the Competition and Markets Authority (CMA), RBS failed to provide annual PPI reminders to almost 11,000 customers for up to six years.