In a surprising turn of events, global stock markets have experienced a significant rebound following US President Donald Trump’s decision to remove the threat of additional tariffs on nations that did not support his push to seize control of Greenland. This move has led to a surge in investor confidence, with the FTSE 100 index rising by around 0.75 per cent within the first hour of trading on Thursday.
The market rally comes after a week of tumultuous trading, as the uncertainty over global trade once again reared its head with the US president’s economic threats. Despite the tariffs being ultimately paid for by American people and companies, the US views them as a sign of strength in their economy, as businesses in other nations routinely export to the States.
While the recent drops in stock markets were not as severe as the shocks experienced last April when tariffs were first announced, the uncertainty over the direction had weighed heavily on investor sentiment. The removal of this uncertainty, with the prospect of companies potentially selling and exporting fewer products if they had to pay a tariff on top of the price, has now boosted confidence among investors.
Across Europe, the German DAX and the Euro Stoxx 50 also saw significant gains of around 1.2 per cent by 9am GMT. This follows a strong performance in Asian markets, with Japan’s Nikkei 225 index rising more than 1.7 per cent overnight, and smaller increases in the Korean Kospi, Shanghai, India’s Nifty 50, and Australia’s ASX 200.
In London, the biggest winner was St. James’ Place, which rose 3.1 per cent in early trading. Other notable performers included Land Securities Group (2.8 per cent), Vodafone (2.8 per cent), and British Land (2.5 per cent).
Despite the positive sentiment, a Danish MP has stated that claims of a deal being struck over Greenland are “not real”. This suggests that the underlying geopolitical tensions may still be a cause for concern, and investors will be closely watching for any further developments on this front.
Overall, the stock market’s rebound reflects the relief among investors following the retraction of Trump’s tariff threat, although the long-term implications of the Greenland issue remain uncertain.
