FTSE 100 climbs sharply as US-focused UK firms benefit from Trump's presidency

The FTSE 100 experienced a significant rise at the start of trading today, while sterling took a hit as traders evaluated the potential impact of Donald Trump's presidency on the global economy and the UK.

London's leading index saw an increase of over 1.4 per cent in early trading, driven by a nearly six per cent surge for US-focused equipment rental company Ashtead, along with substantial increases for Barclays and IHG, as reported by City AM.

Ashtead, which generates approximately 85 per cent of its revenue from the US, has reportedly contemplated shifting its listing to New York within the past year.

"Trump did not mention tariffs in his victory speech, and this is why we are seeing UK firms with US exposure rallying on Wednesday," commented Kathleen Brooks, research director at XTB. "A win for Trump is also seen as being good for the US economy, which is also boosting big UK companies who export to the US."

FTSE 100 constituent Rolls Royce, a major exporter to the US, also saw a rise of around 4.5 per cent.

London's markets have greater exposure to the American economy than many European counterparts, with roughly 28 per cent of revenues generated in the US, according to Bloomberg Intelligence analyst Kaidi Meng.

Pharmaceutical and consumer-related companies are "susceptible to drug re-pricing risks and tariff, " Meng stated today.

"While a potential 10 per cent tariff [...] brings risk to UK exports, other possible impacts include drug-price renegotiation for health-care industry, wage increase and reflation risks from reshoring US manufacturing, higher defence spending and renewable energy disincentivizing," she added.

The FTSE 250, more exposed to the domestic economy, also saw an increase of around two per cent.

Pershing Square Holdings, led by billionaire New York hedge fund chief Bill Ackman, also experienced a near four per cent rise before 8:30am. Ackman has been a prominent business supporter of a Trump presidency.

However, the pound has seen a significant drop to 1.28 against the dollar as investors flock to so-called Trump trades.