Lunchtime market roundup: FTSE 100 fades but peers up after US-EU deal

The FTSE 100 tread water on Monday afternoon, easing from an earlier record high, while European peers remained in the green in the wake of a US-EU trade agreement.

The FTSE 100 index traded down just 3.50 points at 9,116.81, after hitting a record high of 9,169.01 shortly after the opening bell. The FTSE 250 edged up just 1.05 points at 22,119.03, and the AIM All-Share was up 1.17 points, 0.2%, at 777.81.

The Cboe UK 100 was flat at 911.22, the Cboe UK 250 was up slightly at 19,411.61, and the Cboe Small Companies was up 0.9% at 17,883.68.

In European equities on Monday, the CAC 40 in Paris rose 0.5%, while the DAX 40 in Frankfurt added 0.3%.

Sterling faded to $1.3415 early Monday afternoon, from $1.3437 at the time of the London equities close on Friday. The euro fell to $1.1658 from $1.1737. Against the yen, the dollar rose to JP¥148.39 from JP¥147.69.

The US and EU clinched a trade agreement on Sunday that will see EU exports taxed at 15%, in a bid to resolve a transatlantic tariff stand-off that threatened to explode into a full-blown trade war.

US President Trump emerged from a high-stakes meeting with European Commission President Ursula von der Leyen at his golf resort in Scotland, describing the deal as the ‘biggest-ever’.

Axa analyst Gilles Moec commented: ‘The agreement struck between Ursula von der Leyen and Donald Trump on Sunday should put the EU on an equal footing with Japan when trading with the US. Crucially, cars will also be covered by the basic 15% tariff. There remains quite a lot to clarify though, as the statements from the two leaders differed on key elements (e.g. on pharmaceuticals, which account for one fifth of EU exports to the US), but it seems the deal would result in a hike of 14 percentage points to the average tariff levied on European products.

‘This is no small change: according to our usual framework, this would dent the Euro area GDP by roughly half a point. Given the risks of ’no deal‘, the market is likely to react positively though. If, however, this positivity extends to the euro exchange rate, this would be another headwind for the region. The currency appreciation so far this year would hit GDP by roughly the same magnitude as the tariff shock itself.’

There is unlikely to be a ‘resolution’ in talks over US tariffs on UK steel when Donald Trump and Prime Minister Keir Starmer meet on Monday, UK Business Secretary Jonathan Reynolds indicated, saying there was ‘more to do’ in negotiations.

The PM will attempt to hammer out a deal on steel import levies when he meets the US president at Turnberry, Trump’s Ayrshire golf course.

When the UK and US signed a trade deal in June, it reduced tariffs on car and aerospace imports to the US.

But agreement on a similar arrangement for Britain’s steel imports was not reached, leaving tariffs on steel at 25%.

In New York, stocks were called to open higher ahead of a key week on the corporate earnings, economic indicator and central banking fronts. The Dow Jones Industrial Average is called up 0.1%, the S&P 500 up 0.2% and the Nasdaq Composite 0.3% higher.

The Federal Reserve announces an interest rate on Wednesday, a busy week on the US economic calendar culminates with Friday nonfarm payrolls, while the likes of Microsoft, Meta Platforms, Apple and Amazon release earnings in the days ahead.

Gold rose to $3,336.41 an ounce midday Monday, from $3,329.51 at the time of the London equities close on Friday. Brent faded to $68.32 a barrel from $68.66.

The yield on the 10-year US Treasury narrowed to 4.39% from 4.42%. The yield on the 30-year slimmed to 4.93% from 4.96%.

In London, BT shares fell 3.4%. LBBW cut the telecommunications firm to ’hold’ from ’buy’.

Ocean Wilsons shed 15%. Ocean Wilsons said it has agreed the terms for an all-share merger with Hansa Investment that will see the combined firm take on Hansa’s name and listing in London as a closed-ended investment fund.

The combination was first announced by the two Bermuda-based investment companies back in June. They said it will create a company with ‘meaningful scale’ at £900 million in net assets across investment funds, direct equities, and private markets.

Hanseatic Asset Management LBG will be alternative investment fund manager and portfolio manager for the combined company, with Hansa Capital Partners as investment adviser and administrator.

Shareholders of Ocean Wilsons will receive 1.4925 new Hansa share units for each Ocean Wilsons share. A Hansa share unit consists of one voting ordinary share and two non-voting A shares.

As a result, Ocean Wilsons shareholders will own 41.4% of the enlarged company and Hansa shareholders will have 58.6%.

Elsewhere in London, Everyman rose 3.1%. In the 26 weeks to July 3, Everyman Media said revenue was £56.5 million, up 21% from £46.9 million a year prior.

Earnings before interest, tax, depreciation and amortisation climbed 33% to £8.2 million from £6.2 million.

Shares in the company rose 6.5% to 43.66 pence each in London on Monday morning.

Chief Executive Officer Alex Scrimgeour, said: ‘Our performance in H1 reflects the successful execution of our strategy, with growth across all key metrics.’

‘We look forward to building on this momentum in the second half of the year,’ Scrimgeour added.

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