7th Apr 2025 17:01
(Alliance News) - The bloodbath in global equities worsened on Monday, in a roller-coaster end to the day, as Donald Trump warned China he would raise tariffs further and doubled-down on trade policy.
"This market sell-off feels brutal because it is relentless. Often, we see one or two bad days then a rebound. We're now on day three and the sell-off is intensifying, not dying down," said Russ Mould at AJ Bell.
The FTSE 100 index closed down 352.90 points, 4.4%, at 7,702.08. The FTSE 250 ended 600.16 points lower, 3.3%, at 17,765.19. The AIM All-Share lost 16.12 points, 2.5%, at 624.42.
The Cboe UK 100 ended down 4.6% at 766.52, the Cboe UK 250 fell 3.6% at 15,467.52, and the Cboe Small Companies ended down 0.5% at 14,520.77.
In London, fallers were broad-based, with aerospace manufacturer Melrose down 7.9%, consumer products firm Haleon down 5.1%, accountancy software company Sage down 7.7% and pharmaceuticals giant AstraZeneca down 6.1%.
Risers were thin on the ground but hopes for lower interest rates supported housebuilder Taylor Wimpey, up 1.3%, and building materials outfit Howden Joinery, up 0.2%.
In European equities on Monday, the CAC 40 in Paris ended down 4.8%, while the DAX 40 in Frankfurt tumbled 4.1%.
In New York, equities experienced a roller-coaster start to the day. At the time of the London equities close, DJIA was down 1.4%, the S&P 500 index was 0.9% lower, and the Nasdaq Composite was 0.4% worse off.
Mid-afternoon UK time, a rumour that Donald Trump was considering a 90-day pause to tariffs to all countries, other than China, caused mayhem with US markets soaring into the green, before heading south once more.
The White House dismissed the rumour, telling CNBC it was "fake news".
The DJIA traded as high as 39,207.02 and as low as 36,611.78 as traders tried to gauge fact from fiction.
The US president had earlier called for Americans to "be strong, courageous, and patient," stating that the US has a "chance to do something that should have been done decades ago."
Later, Trump wrote on Truth Social that unless China withdraws its 34% tariff on the US by tomorrow, he will impose additional tariffs of 50%.
Additionally, Trump said all talks with China concerning their requested meetings will be terminated. Discussions with other countries which have also requested meetings, will begin immediately, he added.
Stephen Innes at SPI Asset Management said: "Trump’s team isn’t blinking. The tariffs are being treated as a victory lap, not a bargaining chip. Over the weekend, Treasury Secretary Bessent poured gasoline on the fire, declaring, 'our trading partners have taken advantage of us' - offering zero reassurance to markets. It’s clear Washington is using market pain as leverage, not a signal to pivot."
But the policy has attracted criticism from business leaders and investors.
JPMorgan Chase Chief Executive Jamie Dimon said the tariffs will likely boost prices on both domestic and imported goods, weighing down a US economy that had already been slowing.
"Markets still seem to be pricing assets with the assumption that we will continue to have a fairly soft landing," Dimon said. "I am not so sure."
Billionaire investor Bill Ackman said that the US is heading toward a self-inflicted "economic nuclear winter" as a result of the tariff policy rollout.
"Business is a confidence game. The president is losing the confidence of business leaders around the globe," said the chief executive of Pershing Square Capital Management.
In the UK, Prime Minister Keir Starmer called for "cool heads" and said the UK had to "rise together as a nation" in the face of a new era of global instability.
"Let me be really clear, at a moment like this, our future is in our hands, and so of course, we will keep calm and fight for the best deal with the US, and we've been discussing that intensely over the last few days," he added.
"But we are also going to work with our key partners to reduce barriers to trade across the globe, to accelerate trade deals with the rest of the world, and champion the cause of free and open trade right across the globe." he continued.
Meanwhile European Commission President Ursula von der Leyen said the EU had offered the US a bilateral tariff exemption for cars and other industrial goods as it works to avert an all-out transatlantic trade war.
"We stand ready to negotiate with the US. Indeed, we have offered zero-for-zero tariffs for industrial goods, as we have successfully done with many other trading partners," she said.
Von der Leyen repeated Europe's threat that should negotiations fail, the commission was "prepared to respond through countermeasures and defend our interests".
The pound was quoted lower at USD1.2739 at the London equities close on Monday, compared to USD1.2931 at the close on Friday. The euro stood at USD1.0917, lower against USD1.0994 at the same time on Friday.
Against the yen, the dollar was trading higher at JPY147.79 compared to JPY145.80 late Friday.
Brent oil was quoted at USD64.41 a barrel at the London equities close Monday, down from USD65.38 late Friday. Gold was quoted lower at USD2,981.58 against USD3,025.91 at the close on Friday.
Shell fell 5.7% after it said it expects lower natural gas production and liquified natural gas volumes in the first quarter of 2025 than previously forecast, reflecting unplanned maintenance in Australia and adverse weather.
In a trading update, Shell said it expects integrated gas production of 910,000 to 950,000 barrels of oil equivalent. That compared with a range of 930,000 to 990,000 projected in the last quarterly report.
In addition, Shell said LNG production reached between 6.4 million and 6.8 million metric tonnes in the first three months of this year, down from a previous forecast of 6.6 million to 7.2 million tonnes.
Shell is the world's largest LNG trader and recently said it would look to boost sales of the product by 4% to 5% a year between now and 2030.
Integrated gas production was "impacted by unplanned maintenance, including in Australia", with LNG volumes reflecting "weather impact (cyclones) and unplanned maintenance in Australia".
Tuesday's UK corporate calendar has full-year results from Staffline and Hilton Food Group.
The economic calendar for Tuesday has French trade data.
By Jeremy Cutler, Alliance News reporter
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