FTSE starts higher despite Dow slump

European stocks started the day on a stronger note despite the slump on Wall Street and in Asia with the FTSE 100 opening 0.3%. higher as market focus shifted for the moment away from rising global trade tensions.

US stock markets had the worst one day drop in weeks with the DJIA declining 1.3% and the tech stock gauge Nasdaq trading 2.1% lower following reports, which were later disputed by US officials, that the US is planning further barriers on Chinese technology companies. 

Even if the report was not fully correct the swift response in share prices, particularly amongst technology stocks, is a clear indicator of the current mind frame in the stock markets and the heavy role the trade dispute between the US and other countries is playing.

Asian markets were also in the red, particularly in China where the Shanghai Composite fell 1.8% on the day and Hong Kong’s Hang Seng index declined 1.5%

Gold, the go-to safe haven buy, initially traded lower but eventually started benefiting from the upheaval in global stock markets to gain almost 0.4%.

Oil prices also edged up Tuesday because of production outages in Canada and uncertainty over Libyan crude exports but OPEC’s recent decision to ramp up output over the coming months will cap any potential rally.

Investment in British car industry hit by Brexit

Questions about how the eventual Brexit will pan out for business and what restrictions will there be in the dealings between UK businesses and their European counterparts are keeping key British industries under pressure, notably the car industry where investment has fallen by 50% in the first six months of this year. 

UK car makers generate a turnover of $110 billion annually. The country’s biggest car manufacturing lobby said that there is growing frustration in global boardrooms at the slow pace of the Brexit negotiations particularly given that there are only nine months left until Britain leaves the EU.