London open: FTSE ticks up as investors shrug off US tariffs

(Sharecast News) - London stocks edged higher in early trade on Friday as investors shrugged off fresh US tariffs on more than 60 countries, while Brent crude breached $100 a barrel for the first time since May.

At 0830 BST, the FTSE 100 was up 0.3% at 10,671.91, reversing opening losses, while Brent crude was down 1.7% at $99.03 a barrel, having breached $100 following attacks by Iran-backed Houthis on two Saudi Arabian tankers. West Texas Intermediate was down 1.7% at $90.60.

Investors were mulling a fresh round of tariffs from the US to replace a 10% global duty that was due to expire. The US announced on Thursday that it would impose tariffs of between 10% and 12.5% on 60 countries including the UK, Canada and Australia.

US Trade Representative Jamieson Greer said: "The United States has had a forced labour import ban for nearly a century, and rigorously enforces it; it's well past time for our trading partners to do the same.

"Today's action will begin to correct what is both a human rights abuse and distortive trade practice to improve the welfare of workers everywhere."

Richard Hunter, head of markets at Interactive Investor, said: "Quite apart from the resumption of strikes between the US and Iran, Yemen's Tehran-backed Houthi militant group attacked two Saudi Arabian tankers in the Red Sea, which threatens to choke off another oil supply route in addition to the Strait of Hormuz. With the US President now threatening to return to full hostility levels, the oil price surged back to around $100 per barrel, its highest level since May although yet to retain the most recent high of around $120.

"As if these inflationary pressures were not enough to damage sentiment, the US President also announced a fresh round of tariffs as the previous ones expired, ranging from 10% to 12.5% on 60 trading partners, citing the reason that these countries had failed fully to enforce bans on goods produced by forced labour.

"In any event, the potential for higher domestic prices is another concern for the vital US consumer and comes at a politically sensitive time ahead of the mid-term elections in November."

On home shores, figures from the Office for National Statistics showed that retail sales unexpectedly rose in June.

Sales were up 1% on the month following a 1.2% jump in May, and versus expectations for a 0.3% decline. On the year, sales rose 4.2%, ahead of expectations for a 2.3% increase.

The ONS said sales promotions and the warm weather increased sales volumes for non-store and clothing retailers.

The figures showed that the proportion of online sales rose from 28.9% in May to 29.4% in June - the highest proportion since April 2021.

ONS senior statistician Hannah Finselbach: "Internet retailers did especially well, with businesses telling us that this was because of promotions and the warm weather, with strong demand in June for outdoor products, air conditioning and clothing. Sports merchandise also sold well online."

In corporate news, HSBC edged up after agreeing to sell its Singapore life and health insurance business to Allianz for $2.1bn in cash.

Consumer goods giant Reckitt Benckiser nudged up after agreeing to divest its Russian hygiene business to Arnest Management for an undisclosed sum.

Discoverie surged as it hailed continued strong momentum in orders and sales and said full-year adjusted earnings were tracking ahead of the board's expectations.