Donald Trump bounce as City bets on spending spree

The “Donald Trump bounce” extended into a second session today as markets cheered the US President-elect’s pledge to splash billions of dollars on infrastructure.

London’s FTSE 100 gained almost 1% to 6958.60, closing in on the 7000 mark, as Trump’s acceptance speech commitment reverberated through markets.

Shares, metal and oil prices rose while investors bet stronger growth would prompt the Federal Reserve to press on with interest rate hikes, pushing up the dollar against the pound and the euro.

European markets also gained ground following a 7% rise for the Nikkei overnight.

The early smoke signals of a Trump presidency gained a cautious welcome from City bosses.

3i chief executive Simon Borrows, a former co-president of Wall Street investment bank Greenhill, welcomed the new administration and said previous Republican presidents had been good for business and the markets.

“As long as Trump’s foreign policy doesn’t reflect his campaigning, this may surprise on the upside,” he said.

“Tax cuts, infrastructure spending, some level of deregulation — that sounds pretty good for the business outlook.”

National Grid boss John Pettigrew also welcomed Trump’s “positive statements” on the need for more infrastructure spending in the world’s biggest economy.

The firm plans to spend $2.5 billion on the upkeep of its gas and electricity pipes in Massachusetts, New York and Rhode Island and a policy shift could address the need to replace old assets or connect new customers, he said.

“It’s early days but that’s an important signal for us,” Pettigrew added.

Miners were one of the main beneficiaries of the infrastructure hints as copper miner Antofagasta surged to the top of the Footsie leaderboard with a stunning 10% gain.

That was fuelled by a 4% jump in the copper price to its highest level in nearly 16 months, alongside big gains for aluminium and nickel prices.