Markets close up as Trump insists US-China trade deal on track

Markets crept higher on Tuesday, reversing the falls a day earlier, despite the best attempts of the White House to spook Asian markets overnight.

Comments made by the US Government’s economic adviser Peter Navarro in an interview with Fox News, saw him say the US-China trade deal was over.

President Donald Trump took to Twitter to say it is “fully intact” and Mr Navarro claimed his comments had been taken out of context.

With hopes that the deal will remain on the table, the FTSE 100 closed the day up 75.5 points or 1.21% at 6320.12.

European indexes fared similarly, with the French Cac up 1.39% and German Dax up 2.13% – even as one of its biggest constituents, Wirecard, saw their former chief executive arrested for alleged fraud over account irregularities at the firm.

David Madden, financial analyst at CMC Markets UK, said: “The confirmation that trading relations were good acted as a boost to sentiment, and it helped distract traders from the health crisis.”

The UK also enjoyed a slight boost as the latest Purchasing Managers’ Index showed a marked improvement in the private sector compared with May, with the manufacturing industry showing a small amount of growth again.

In company news, investor reaction was muted to the heavily trailed announcement that the Government would be reducing the social distancing guidelines from two metres to one metre in England.

Mr Madden said: “The update didn’t come as a shock as there was speculation about this for a while, but it was welcomed nonetheless.”

Pubs and restaurants can reopen with social distancing guidelines in place from July 4, but spas, gyms and bowling alleys, among other venues, must remain closed, the Government said on Tuesday.

Shares in The Gym Group shed 5.6p to 162.6p although Hollywood Bowl closed up 2.5p at 161.5p.

Despite shops reopening, Trafford Centre owner Intu Properties warned that its shopping malls across the UK may have to close as it put administrators at KPMG in standby, as it struggles with huge debts.

Shareholders have already run for the hills at Intu, with its problems known since before the coronavirus crisis, as shares down 0.21p to 4.4p.

Retailer Shoe Zone said it would axe 20 stores and announced job losses at its head office to slash costs, as it warned the aftermath of the coronavirus pandemic will last for years.

The group said 470 of its 490 shops will reopen across the UK by the end of the month, when Wales and Scotland follow the lead of England next week. Shares closed down 4.5p at 83p.

Elsewhere, the UK’s biggest property website Rightmove warned it will take another hit of up to £20 million as it cuts prices for estate agents to help them weather the coronavirus crisis. Shares fell 24.4p at 564.6p.

The biggest risers on the FTSE 100 were Evraz up 23.6p at 331.6p; Standard Life Aberdeen up 16p at 269.6p; Just Eat Takeaway up 386p at 8,244p; Fresnillo up 38.8p at 853.6p and M&G up 6.9p at 167.5p.

The biggest fallers were Hikma down 140p at 2,340p; Rightmove down 24.4p at 564.6p; Ocado down 71p at 1,981p; IAG down 7.1p at 251.9p and Auto Trader down 15p at 533p.