FTSE 100 Rallies off 52 Week Lows – Bounce Fades Into Close

The FTSE 100 index experienced a solid gain today, rebounding from 52 week lows hit during yesterday's session to post 208 point gain to close the day up 2.71%. With the recent close of 7,702.08 a low on the year, the Footsie looked set to retest 8,000, only for the rally to fade into the close, giving back more than 1% of the earlier gains.

This upturn was seen across global markets today in early trading, with major UK contributions from leading companies such as Rolls-Royce (LON: RR), Raspberry Pi (LON: RPI) and International Consolidated Airlines Group (LON: IAG).

Rolls-Royce shares (LON: RR) ended the day up 6.83%, Raspberry Pi shares closed 6.13% in the green, whilst IAG's share price (LON: IAG) added 5.93%. This recovery followed a significant previous drop of more than 10% over the past 4 trading sessions, highlighting the volatility within the market amidst ongoing trade tensions.

In the broader economic context, UBS predicts that the eurozone is likely to enter a technical recession in the second half of 2025. This is attributed to the new trade tariffs announced by Donald Trump, which have led to a revision of the eurozone's GDP growth forecast for 2025, now anticipated to be 0.5%. Similarly, UBS has revised the UK's GDP growth forecast for 2025 down to 0.7% from an earlier projection of 1.1%.

Trade relations between major economies remain tense. Donald Trump has dismissed the EU's proposal for zero-for-zero tariffs on industrial goods, advocating instead for increased energy purchases from the US. This move has been criticized by China's Ministry of Commerce, which views the US tariff escalation as an error and has vowed to respond as necessary. In addition, EU Commission Chief Ursula von der Leyen has urged China to engage in negotiations with the US to prevent further trade war escalations.

While the FTSE 100's recovery is a positive signal, the ongoing international trade tensions pose significant risks to future economic stability in both the UK and the broader eurozone. Strategic decisions by global leaders in navigating these trade negotiations will be crucial in shaping economic outcomes over the coming years.