UK stocks rebound as US tariff reprieve eases trade worries

A man walks through the lobby of the London Stock Exchange. The FTSE 100, which had started off the session in the red amid Hong Kong protests and the US-China trade worries, ended 0.3 per cent higher. — Reuters pic
A man walks through the lobby of the London Stock Exchange. The FTSE 100, which had started off the session in the red amid Hong Kong protests and the US-China trade worries, ended 0.3 per cent higher. — Reuters pic

LONDON, Aug 14 ― UK shares bagged gains for the day, reversing earlier losses, after the United States said it would delay tariffs on some Chinese products, offering respite to investors who had been gripped with fears over the trade dispute.

Online trading platform Plus500 soared on a buy-back plan.

The FTSE 100, which had started off the session in the red amid Hong Kong protests and the US-China trade worries, ended 0.3 per cent higher. The midcap index rose 0.5 per cent.

The United States delayed imposing a 10 per cent import tariff on laptops, cell phones, video game consoles and some other products made in China that had been scheduled to start next month, in an abrupt pull-back from a hardline stance on Chinese trade.

That had taken focus off the worries over protests in Hong Kong, which had recently weighed on shares in the FTSE 100's Asia-focussed financials such as HSBC and Standard Chartered.

Still, the Hong Kong protests' impact on Asia-focussed financials including HSBC, as well as pressure from simmering US-China trade tensions have placed the FTSE 100 on track for its biggest monthly fall since October 2018.

“With worries about a recession brewing in Germany, political uncertainty in Italy and violent scenes in Hong Kong, the easing up of hostilities between the US and China has been a welcome change to the doom and gloom of the past few days,” CMC Markets analyst David Madden said.

On the midcap index, Plus500 surged 21 per cent, erasing one-third of its year-to-date losses, after its new share buyback plan offset a more than 50 per cent slump in first-half earnings.

Luxury carmaker Aston Martin, on the other hand, lost 4 per cent after Credit Suisse downgraded its rating and slashed its price target by more than two-thirds. A Financial Times report also said hedge funds had taken short positions in the company.

Blue-chip retailers Next, Marks & Spencer and Tesco lost 1.2-2 per cent a day after data showed 10.3 per cent of shops in Britain were vacant, the highest rate in four years.

More than 50 retailers, including Sainsbury's and M&S, have urged the government to freeze business rates to help out the struggling sector.

London-listed shares of tour operator TUI , which earlier rose as much as 4.4 per cent, ended the day slightly lower after reporting a 46 per cent decline in core earnings amid problems with the grounding of Boeing's 737 MAX jets in the third quarter. ― Reuters

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