27th Mar 2025 12:05
(Alliance News) - European blue chips were trading lower at midday on Thursday, as Donald Trump's latest tariffs on US car imports plunged the global automobile sector into the red.
The FTSE 100 index was down 56.00 points, 0.6%, at 8,633.59. The FTSE 250 was down 123.69 points, 0.6%, at 19,915.65, and the AIM All-Share was up 2.36 points, 0.3%, at 696.17.
The Cboe UK 100 was down 0.7% at 862.55, the Cboe UK 250 was down 0.7% at 17,388.62, and the Cboe Small Companies was 0.3% higher at 15,591.13.
In European equities on Thursday, the CAC 40 in Paris was down 0.6%, while the DAX 40 in Frankfurt was 1.0% lower.
"European markets are rather predictably on the back foot in the wake of Donald Trump’s announcement that all non-US made vehicles would be hit by a 25% tariff. Recent glee over the notion that Trump wouldn’t impose sector specific tariffs on 2 April have been entirely undermined by the fact that the President has instead opted to start announcing such measures ahead of that date," commented Scope Markets analyst Joshua Mahony.
"The fact that we have seen losses on both sides of the Atlantic does signal the risk of a trade war which would more than likely hurt the US economy and sentiment for the highly globalised businesses listed in the US market. The fact that Trump appears to favour efforts to boost jobs and US growth despite the likely damaging costs and export implications for US companies does highlight his preference for Main Street over Wall Street for the time being.
"For Europe, the prospect of a trade war with the US doesn’t help sentiment, with the reciprocal tariffs still yet to come into play. The weakness we have seen across the Korean KOSPI, Japanese Nikkei and now European indices does highlight the pessimism felt within those countries that are major exporters of cars into the US. However, the relatively muted size of those moves highlight the fact that much of the news has already been priced in over recent months."
The US announced a 25% tariffs on cars imported into the US in a bid to boost the domestic auto industry, which will go into effect on April 2 and apply to all cars not made in the US. This means even US manufacturers with models made overseas would be hurt under the scheme.
Major car exporter Germany called for a firm response from the EU, while Japan said it "will consider all options." The UK is not planning "at the moment" to introduce retaliatory tariffs on the US, Chancellor Rachel Reeves has said.
In response, car manufacturers across the world have slid into the red. Toyota, Hyundai Motor, and Mercedes-Benz led the plunge, being down 2.0% in Tokyo, 4.3% in Seoul and 3.3% in Frankfurt, respectively.
Aston Martin and Stellantis were down 5.0% in London and 4.0% Milan respectively. Renault was up 1.0% in Paris.
Volkswagen was down 2.0%, Porsche AG was 4.1% lower, Porsche Automobil Holding was down 3.2% and BMW was down 2.2%, all in Frankfurt.
Trump's levies rattled domestic manufacturers too, with Tesla Chief Executive Officer Elon Musk admitting his company would not be spared the pain.
"To be clear, this will affect the price of parts in Tesla cars that come from other countries. The cost impact is not trivial," Musk wrote on X.
Tesla shares were up 0.7% in pre-market trading in New York.
Stocks in New York were called lower. The Dow Jones Industrial Average was called marginally down, the S&P 500 index down 0.2%, and the Nasdaq Composite down 0.4%.
The pound was quoted higher at USD1.2934 at midday on Thursday in London, compared to USD1.2894 at the equities close on Wednesday. The euro stood lower at USD1.0783, against USD1.0788.
Against the yen, the dollar was trading up at JPY150.94 compared to JPY150.53.
M&G was the FTSE 100's biggest loser at midday on Thursday, down 14%.
This followed Fintel's appointment of Tom Hegarty as chief executive officer of its subsidiary Simblybiz, effective Tuesday next week. Hegarty is the former managing director of M&G Wealth Advice.
Fintech and support services provider Fintel was down 1.7%.
Meanwhile, Australian fintech firm GSTechnologies fell 16% after providing a corporate update on Thursday.
GSTechnologies in January completed the acquisition of the Bake Cryptocurrency platform, and confirmed on Thursday that the platform's integration with its digital asset arm GS Fintech has now been successfully completed too.
The company also announces its planned acquisition of Poland-based Metapay, and postpones its previously-announced EasySend deal while it monitors "the appropriateness" of EasySend joining the group. In addition, GSTechnologies scraps its potential acquisition of Spanish firm Bonfirepay.
At the other end, SRT Marine Systems was up 24% around midday.
The developer of maritime domain awareness systems swung to a pretax profit of GBP2.1 million in the six months to December 31, from a loss of GBP4.6 million a year prior, as revenue multiplied to GBP26.2 million from GBP5.5 million.
"I am delighted with our operational and financial performance during the first half which is rooted in many years of hard work to build up our technologies, products and global market position. As we expected we have seen solid revenues from both transceivers and systems divisions and look forward to continued growth into H2 and the years ahead," said SRT Chief Executive Officer Simon Tucker.
United Oil & Gas was 21% higher.
The AIM-listed oil and gas company said it has secured an early two-year extension to the Walton Morant licence offshore Jamaica in which it holds a 100% working interest. The licence is now valid until January 31, 2028.
United also noted that it has restarted talks with "selected parties" for a possible farm-out deal at the Walton Morant licence.
Advanced Medical Solutions was up 16%.
Montagu Private Equity announced it is considering making a takeover offer for the Cheshire-based surgical dressings company.
Montagu has until April 24 to announce a firm intention to make an offer, or to announce it does not intend to make an offer.
Brent oil was quoted lower at USD72.86 a barrel at midday in London on Thursday from USD73.95 late Wednesday.
Gold was quoted higher at USD3,052.68 an ounce against USD3,018.09.
"Gold prices edged up in early Thursday trading, hovering near weekly highs as the European session got underway. The gains were driven by renewed concerns over the economic impact of the US administration’s trade policies, boosting the appeal of gold as a haven asset. Expectations that the Federal Reserve will resume interest rate cuts in early summer, coupled with the US dollar’s retreat from a multi-week high, provided additional support for the precious metal," commented ActivTrades analyst Ricardo Evangelista.
"However, the upside remains capped for now as Beijing’s commitment to introducing growth-driven stimulus fuels greater risk appetite, while an uptick in US Treasury yields weighs on non-yielding gold. Against this backdrop, bullion prices are likely to remain rangebound, supported above the key psychological level of USD3,000, with resistance around the all-time highs reached last week.
"Traders are already turning their attention to tomorrow’s release of US PCE data, the Fed’s preferred inflation gauge, which has the potential to influence expectations around the central bank’s monetary policy and impact gold prices."
Still to come on Thursday's economic calendar, US initial jobless claims, quarterly personal consumption expenditures and GDP figures at 1230 GMT.
By Emily Parsons, Alliance News reporter
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