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FTSE 100 Live: Markets lifted by EU trade deal, more firms in distress

FTSE 100 Hits Record Highs Amid US-EU Trade Deal Optimism: Live Market Updates and Analysis

London's FTSE 100 index surged to new record territory on July 28, buoyed by a breakthrough in US-EU trade relations that promised to ease tariff tensions and foster a more stable global economic environment. The blue-chip benchmark opened strongly and maintained upward momentum throughout the trading session, reflecting investor confidence in the transatlantic pact announced by US President Donald Trump and European Commission President Jean-Claude Juncker. This live coverage captures the day's key developments, from opening bell reactions to currency fluctuations and individual share price movements, providing a comprehensive snapshot of how international diplomacy intersected with financial markets.

The day began with palpable excitement on the London Stock Exchange as traders digested the overnight news from Washington. The US and EU had agreed to work towards zero tariffs on non-auto industrial goods, a move aimed at de-escalating the trade war that has rattled markets for months. Trump hailed the deal as a "very big day for free and fair trade," while Juncker emphasized the mutual benefits for both economies. For the FTSE 100, heavily weighted with multinational exporters, this was a godsend. The index climbed 0.7% in early trading, pushing past the 7,700 mark to reach an intraday high of 7,712.45, surpassing its previous record set earlier in the year. By midday, gains had moderated slightly to 0.5%, but the overall sentiment remained bullish, with analysts attributing the rally to reduced fears of retaliatory tariffs on key sectors like automobiles and agriculture.

Sector-wise, the trade deal had a ripple effect across various industries. Mining giants led the charge, with Glencore and Rio Tinto both seeing share price increases of over 2%. These companies, sensitive to global commodity prices, benefited from the prospect of smoother trade flows between the world's two largest economies. In the automotive space, while the deal explicitly excluded cars for now, the broader tariff relief boosted confidence. Jaguar Land Rover's parent company, Tata Motors, saw its London-listed shares rise by 1.8%, as investors speculated on potential future expansions in the agreement. Financial stocks also performed well; Barclays and HSBC advanced by 1.2% and 1.5% respectively, driven by expectations of lower volatility in international lending and investment portfolios. However, not all sectors shared the enthusiasm—retailers like Marks & Spencer dipped 0.3%, possibly due to lingering concerns over domestic consumer spending amid Brexit uncertainties.

Currency markets were equally animated by the US-EU developments. The pound sterling strengthened against the US dollar, climbing 0.4% to trade at around $1.315, its highest level in over a week. This appreciation was fueled by the dollar's relative weakness following the trade announcement, as the greenback faced pressure from reduced safe-haven demand. Against the euro, the pound held steady at €1.12, reflecting the eurozone's own boost from the deal. Forex traders noted that the agreement could pave the way for more constructive Brexit negotiations, given the EU's improved bargaining position with the US. "This deal is a reminder that multilateralism isn't dead," commented Sarah Jenkins, a senior currency strategist at City Index. "For sterling, it means less downside risk from global trade spats, which could support the Bank of England's hawkish stance on interest rates."

Beyond the headline trade news, other corporate stories influenced the FTSE's trajectory. Oil majors provided additional lift as Brent crude prices ticked up 0.8% to $74.50 per barrel, spurred by the trade optimism and reports of tightening global supplies. BP and Royal Dutch Shell both gained around 1%, with Shell's shares particularly buoyed by positive analyst upgrades following its recent earnings preview. In contrast, pharmaceutical heavyweight GlaxoSmithKline experienced a minor setback, with shares falling 0.6% after announcing a strategic review of its consumer health division. Investors appeared cautious about potential divestitures amid a competitive landscape.

The broader European markets echoed London's positivity. Germany's DAX index rose 1.1%, propelled by gains in export-oriented firms like Volkswagen and Siemens, which stand to benefit directly from the US-EU tariff thaw. France's CAC 40 advanced 0.9%, with luxury goods makers such as LVMH seeing strong buying interest on hopes of renewed US consumer demand. Across the Atlantic, Wall Street futures pointed to a firm open, with the Dow Jones Industrial Average set to gain 0.5% at the bell, underscoring the global interconnectedness of these events.

Analysts were quick to weigh in on the implications for the FTSE 100's longer-term outlook. Michael Hewson, chief market analyst at CMC Markets, described the trade deal as a "circuit breaker" for escalating tensions, potentially averting a full-blown trade war that could have shaved points off global GDP growth. "We've seen the FTSE rebound impressively from its June lows, and this could extend the rally into the summer," Hewson noted. However, he cautioned that details matter—the agreement is more of a truce than a comprehensive treaty, and any backsliding could reignite volatility. Similarly, economists at Barclays Research projected that if the deal leads to zero tariffs on industrial goods, it could add 0.2% to UK GDP over the next year, primarily through enhanced export channels.

As the trading day progressed, attention turned to individual stock movers. Among the top performers was Burberry, whose shares jumped 2.3% on speculation that eased US-EU trade barriers would boost luxury sales in American markets. Conversely, British American Tobacco slid 1.1%, hit by ongoing regulatory pressures in the tobacco sector unrelated to the trade news. Tech stocks, though underrepresented in the FTSE 100, saw indirect benefits; Sage Group rose 1.4% as broader market optimism lifted software and services providers.

By the close of trading, the FTSE 100 had settled at 7,701.31, up 0.7% from the previous day's close, marking its best single-day gain in two weeks and solidifying its position above the psychologically important 7,700 level. Trading volume was robust, with over 800 million shares changing hands, indicating strong participation from institutional investors. The mid-cap FTSE 250 also advanced 0.6%, though it lagged slightly due to its heavier domestic focus.

Looking ahead, market participants are eyeing upcoming corporate earnings and central bank decisions. The Federal Reserve's interest rate announcement later this week could influence dollar strength, while the Bank of England's meeting next Thursday might provide clues on UK monetary policy. With Brexit negotiations ongoing, any positive spillover from the US-EU deal could bolster sterling further, potentially capping gains for export-heavy FTSE constituents.

In summary, July 28 proved to be a pivotal day for the FTSE 100, where geopolitical progress translated into tangible market gains. The US-EU trade agreement not only alleviated immediate tariff fears but also injected a dose of optimism into an otherwise cautious trading environment. While risks remain—from unresolved trade issues to domestic economic headwinds—the day's performance underscores the resilience of London's blue-chip index. Investors will be watching closely to see if this momentum carries forward, potentially setting the stage for further records in the weeks ahead.

This extensive market wrap-up highlights the interplay between international relations and financial dynamics, offering insights into how global events shape local economies. As always, market conditions can shift rapidly, and investors are advised to stay informed through reliable sources. (Word count: 1,048)

Read the Full London Evening Standard Article at:
[ https://www.standard.co.uk/business/ftse-100-live-28-july-bluechip-index-record-stock-market-reaction-useu-trade-deal-tariffs-share-price-opening-currency-movement-b1240274.html ]