FTSE 100 plunges as global trade war ramps up
The FTSE 100 nosedived today after China announced a 34 per cent retaliatory tariff against the US.
Trump’s ‘Liberation Day’ assault has continued to linger over markets, with the UK’s flagship index closing on a 4.9 per cent loss at 8,063.12.
This was the FTSE 100’s biggest loss since the beginning of the pandemic on March 27 2020.
Lenders, miners and industrials were among the top fallers, continuing a trend from Thursday.
Natwest and Barclays shares both traded down nearly nine per cent. Rolls-Royce led the FTSE 100’s top fallers after a near 12 per cent loss.
Fresnillo was both off by over 10 per cent. Glencore was not far behind at over nine per cent.
Standard Chartered, which was the FTSE’s top faller on Thursday, slumped over four per cent.
JD Sports was the FTSE 100’s only riser gaining 2.9 per cent.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “Another jolt of fear has shot through markets, as China’s threat of retaliation has materialised.
“The big concern as that this a sign of a sharp escalation of the tariff war, which will have major implications for the global economy. The stock shock has shown up in even sharper losses with European indices sinking deeper into the red.”
She added: “The UK may appear to have been dealt a better hand in this round of tariffs, but it’s so interlinked with global trade, it’s set to be slammed by the harsh winds blowing through the global economy.”
Markets suffered worst week in five years
Russ Mould, investment director at AJ Bell, said: “With markets having suffered their worst week in five years, investors were hiding under their duvet on Friday hoping the pain would go away.”
“Unfortunately, the relentless selling continued, with markets falling across Asia and Europe and futures prices implying the US will do the same when trading begins later on.”
Mould added “countless sectors” were set to be hit by tariffs, but the amount of “moving parts” made it difficult to “know where to begin to comprehend the situation”.
“Investors looking to buy on the dip were spoiled for choice given the sharp declines seen on the market this week. It’s now a question of when investors feel brave enough to go shopping. Today’s extended sell-off implies investors are still too nervous to take the plunge,” he added.
On Thursday, the FTSE 100 shed 133 points, which marked a 1.6 per cent loss to 8,474.74.
Trump’s slapped a 10 per cent baseline levy on all countries trading with the US in his speech on Wednesday, but increased the rate for those he deemed the “worst offenders”.
The UK was handed the 10 per cent import tax, meanwhile the European Union was dealt a 20 per cent blow.
‘Markets appear to have been unprepared’
In Europe, stocks took a bruising.
Germany’s Dax sunk 4.7 per cent, Cac 40 in Paris fell 4.3 per cent and Amsterdam’s AEX tumbled 4.1 per cent on the back of China’s tariff announcement.
Tariff woes triggered some of Wall Street’s biggest losses since 2020 on Thursday.
The Nasdaq Exchange saw the worst of losses, with tech giants Apple and Nvida falling nine and eight per cent respectively.
The S&P 500 fell nearly five per cent whilst the Dow Jones plunged four per cent.
Derren Nathan, head of equity research at Hargreaves Lansdown: “Despite months of sabre-rattling by Donald Trump, markets appear to have been unprepared for the depth and breadth of tariffs announced by the White House.
“The FTSE 100 is set to open down a touch further, after US stocks suffered their worst day in five years.”
He added: “The tech-heavy Nasdaq saw the worst of it, falling nearly 6 per cent, but there were hefty drops amongst the banks, industrials and energy sectors. Traditional defensive havens offered some refuge with gains seen in consumer staples and utilities.”