The FTSE 100 continued making gains on Friday, reaching levels last seen before Donald Trump announced sweeping global trade tariffs in early April.
London’s blue-chip index ended the day up 46.01 points to finish at 8,679.76, a 0.53% increase.
Mr Trump said on Friday that the US is to set new tariff rates, after several weeks spent scaling back sweeping import levies on goods imported into the US.
The US president said it was “not possible to meet the number of people that want to see us” to make a trade deal.
It comes after the US struck a deal with the UK earlier this month, providing relief on tariffs for products including steel and cars.
The country also jointly announced tariff reductions with China this week.
Michael Hewson, an analyst at MCH Insights, said markets appeared to have decided that the tariff threat was over, at least temporarily.
He said the market “appears to have made up its mind” over tariffs, pointing to record highs on Germany’s Dax index and more gains on the FTSE 100.
“It’s notable that the best gainers year to date are the likes of Babcock, BAE Systems and Rolls-Royce, all companies that do a significant amount of business in the US,” he said.
In Europe, Germany’s Dax rose 0.075%, after earlier gains were tempered later in the day, and France’s Cac 40 rose 0.19%.
On Wall Street, the S&P 500 was up 0.054% as UK markets were closing, while the Dow Jones was up 0.012%.
Sterling was down 0.33% against the US dollar at 1.3261, while it was 0.081% up against the euro at 1.1897.
In company news, media and comparison website group Future said it expects revenues to decline this financial year in the face of “ongoing macroeconomic uncertainty”.
The Go.Compare and Marie Claire owner said it is adopting a “more cautious view” for the second half of the year in the face of “challenging” market conditions.
The group said its US direct digital advertising business witnessed a “weaker performance” in March, but returned to growth last month.
Shares in the company plunged 9.37%.
Elsewhere, the bidding war for NHS landlord Assura looked to be heating up after healthcare investor Primary Health Properties (PHP) said it had made an offer worth £1.68 billion.
It outbids the £1.61 billion takeover price offered by US private equity giants Kohlberg Kravis Roberts (KKR) and Stonepeak Partners, which Assura said it had accepted last month.
The takeover tussle for the medical property giant has seen both bidders up their offers several times to try and clinch a deal.
Assura shares rose 1.6%.
The biggest risers on the FTSE 100 were British American Tobacco, up 110p to 3187p, GSK, up 32p to 1394.5p, St James’s Place, up 23p to 1094p, Scottish Mortgage Investment Trust, up 19.3p to 1010.5p, and F&C Investment Trust, up 21p to 1110p.
The biggest fallers on the FTSE 100 were Anglo American, down 77p to 2066p, Melrose Industries, down 10.2p to 465.4p, Antofagasta, down 35p to 1821p, Glencore, down 4.6p to 266p, and Kingfisher, down 5.3p to 310.8p.
