The Aftermath Of America’s Withdrawal From The Nuclear Deal

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Wednesday, 9th May: To re-cap, so far, the president has almost started a trade war with China, an actual war with North Korea, and has now walked away from a deal which will consequently cause further conflict in the Middle East and he has decided to reimpose economic sanctions on Iran too. After a painful wait on Tuesday, President Trump announced his decision, and as expected he has taken the United States out of the international nuclear deal with Iran, sending the price of Brent crude past $77.00 a barrel at 09:00 GMT on Wednesday morning.

Oil stocks were at the top of the index because of the news in the morning. Royal Dutch Shell, BHP Billiton, BP, Antofagasta, Glencore and Fresnillo were all amongst the top ten gaining stocks on the FTSE 100 during early hours of trading.

At the very top however was a group which remained unaffected by Trumps’ decision, Imperial Brands, whose shares were up more than 4.0% after the half-year update which announced a 10% increase in the dividend but 0.1% decrease in revenue. At the other end of the spectrum was Compass Group, who were down more than 5.0% after revealing they missed the consensus revenue estimates.

While the US’s exit from the trade deal helped lift oil stocks, it had the opposite effect on airlines such as TUI, easyJet and International Consolidated Airlines who were all losing after the market came to terms with the potential collapse of a $38 billion deal between Tehran and some Western airline companies.

The European Union responded by suggesting that America’s participation in the deal is not necessary to keep it standing, and that they would stick by Iran in making sure sanctions remain lifted so long as Tehran keep up with their end of the deal.

Support for oil stocks and the pressure on airlines lasted for the majority of the day on the FTSE 100 and FTSE 250, both of which closed 1.28% and 0.42% higher respectively.

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