9th Apr 2025 06:55
(Alliance News) - Stocks in London are set to open lower on Wednesday, following the announcement of a new round of US tariffs set to hit China.
IG says futures indicate the FTSE 100 to open down 256.0 points, 3.3%, at 7,654.53 on Wednesday. The index of London large-caps closed up 208.45 points, 2.7%, at 7,910.53 on Tuesday.
Additional US tariffs on Chinese imports are set to reach 104% on Wednesday, the White House told AFP, as Washington doubles down on planned action after Beijing vowed a "fight to the end" on levies.
US President Donald Trump had vowed a further 50% tariff on goods from China if Beijing did not retract upcoming retaliation – and the White House confirmed that Trump will proceed with this action, taking the overall added duties this year to 104%.
In the US on Tuesday, Wall Street ended lower, with the Dow Jones Industrial Average down 0.8%, the S&P 500 down 1.6% and the Nasdaq Composite down 2.2%.
EU chief Ursula von der Leyen warned against escalating a trade standoff during a phone call with Chinese Premier Li Qiang on Tuesday, the European Commission said.
Speaking with Li after Beijing vowed to "fight to the end" against fresh tariffs threatened by Trump, von der Leyen stressed the "vital importance of stability" for the world's economy.
Meanwhile, UK Chancellor Rachel Reeves has insisted Britain is "accelerating trade deals with the rest of the world", as countries across the globe have been braced for potential widespread economic damage from the import taxes on goods entering the US from midnight Washington time – just after 0500 BST.
The chancellor and Business secretary will later meet India's finance minister for talks aimed at negotiating a deal with the country as the chancellor said she wanted to create "the best possible conditions" for British business in a "changing world".
Sterling was quoted at USD1.2830 early Wednesday, up from USD1.2772 at the London equities close on Tuesday.
The euro traded at USD1.1037 early Wednesday, higher than USD1.0914 late Tuesday. Against the yen, the dollar was quoted lower at JPY145.35 versus JPY146.95.
"We did kick things off yesterday with a dead cat bounce in the equity complex, with sentiment initially looking somewhat steadier, and European indices closing in the green. That fizzled out rather quickly, though, with major Wall Street benchmarks again notching chunky declines, and futures extending those losses to the tune of another 2% overnight. It goes without saying that uncertainty on the global trade front remains at ridiculously elevated levels. Accurately pricing risk remains essentially impossible," commented Pepperstone analyst Michael Brown.
In Asia on Wednesday, the Nikkei 225 index in Tokyo was 4.1% lower. In China, the Shanghai Composite was up 0.6%, while the Hang Seng index in Hong Kong was down 1.4%. The S&P/ASX 200 in Sydney closed 1.9% lower.
Pepperstone analyst Dilin Wu said: "For China, the tariffs could significantly drag down exports and industrial output—two key engines of growth—while the tech and [electric vehicle] sectors may be particularly hard hit. We're likely to see softer oil demand as a result. At the same time, the 104% tariff could push US inflation back toward 4%, even before other new tariffs are factored in.That would raise the odds of a deeper recession in the US as well."
Brent oil was trading at USD60.44 a barrel early Wednesday, lower than USD63.95 late Tuesday. Gold was quoted higher at USD3,016.60 an ounce early Wednesday, from USD3,009.89 on Tuesday.
In Wednesday's corporate calendar, a trading statement from sports retailer JD Sports.
In the economic calendar on Wednesday, minutes from the last Federal Open Market Committee meeting.
By Emily Parsons, Alliance News reporter
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