3rd Apr 2025 12:14
(Alliance News) - Stock prices in London remained firmly in the red at midday on Thursday on the back of US "Liberation Day" tariff announcements, as gold begins to retreat after reaching a record high late on Wednesday.
The FTSE 100 index was down 127.76 points, 1.5%, at 8,482.36. The FTSE 250 was down 292.78 points, 1.5%, at 19,357.95, and the AIM All-Share was down 11.58 points, 1.7%, at 674.19.
The Cboe UK 100 was down 1.5% at 845.02, the Cboe UK 250 was down 1.0% at 16,932.04 , and the Cboe Small Companies was 0.5% lower at 15,088.54.
"Investors put their tin hats on and buckled down to assess the damage to their portfolios as financial markets went into a tailspin after Donald Trump’s Liberation Day speech," said AJ Bell analyst Dan Coatsworth.
"Stocks and shares wobbled as investors priced in a potential hit to profits across multiple sectors and geographies. Brent Crude oil fell nearly 3% on the prospect of a slowdown in global economic growth. The US dollar index fell 1.3%.
"When faced with uncertain times, investors normally form an orderly queue to load up on gold. However, even the shiny stuff fell in value as the Liberation Day gloom set in."
Gold was quoted lower at USD3,104.89 an ounce against USD3,126.39 at the London market close on Wednesday. The yellow metal reached a record high of USD3,167.69 an ounce late on Wednesday night.
In European equities on Thursday, the CAC 40 in Paris faded 2.5%, while the DAX 40 in Frankfurt slipped 2.2%.
Stocks in New York were called lower in the wake of US President Donald Trump's "Liberation Day" tariff announcements. The Dow Jones Industrial Average was called down 2.6%, the S&P 500 index down 3.2%, and the Nasdaq Composite 3.6% lower.
US President Donald Trump on Wednesday announced sweeping and severe reciprocal tariffs as he pledged to "make America wealthy again." Trump said the US will calculate the combined rate of all other countries tariffs and "charge them roughly half of what they are charging us."
The UK will face a 10% tariff, which will be the baseline, the EU 20% and China 34%. Other tariffs imposed include Vietnam at 46%, Cambodia 49%, Taiwan 32%, Japan 24%, South Africa 30%, India 26%, South Korea 25%, Thailand 36%, Switzerland 31% and Indonesia 32%.
Trump also reiterated the US will impose a 25% tariff on all foreign-made automobiles.
"April 2, 2025, will forever be remembered as the day American industry was reborn, the day America’s destiny was reclaimed and the day that we began to make America wealthy again," he said.
Trump added that tariffs will bring back a "golden age" for the US, and said jobs and factories "will come roaring back into our country."
Scotland's Deputy First Minister has called on the UK government to leave no stone unturned in efforts to secure a trade deal with America, as she warned tariffs imposed by US President Donald Trump will impact on some of Scotland's key industries.
Kate Forbes said the Scotch Whisky Association had already estimated the 10% tariff imposed by the billionaire politician could result in between GBP200 million and GBP400 million worth of export losses annually.
On the imposition of tariffs, the deputy first minister said there was "no doubt this will have an impact on some of our key industries".
The EU is already preparing countermeasures in response to the new tariffs, European Commission President Ursula von der Leyen said on Thursday. Speaking on the sidelines of a summit with Central Asian leaders in Uzbekistan, she called Trump's move a "major blow to businesses and consumers worldwide," adding that Europe was ready to respond and protect its interests.
Meanwhile, Beijing on Thursday also threatened countermeasures to US tariffs on Chinese goods.
The US has already imposed 20% tariffs on Chinese imports, prompting retaliation from Beijing. The latest round, which Trump announced on Wednesday, adds a 34% tariff hike, raising total duties on many Chinese products to over 50%.
China's Ministry of Commerce said the tariffs violated international trade rules and were based on subjective and unilateral assessments by the US, calling them a typical act of bullying.
The pound was quoted at USD1.3168 at midday on Thursday in London, up from USD1.2967 at the equities close on Wednesday. The euro also stood higher, at USD1.1147 against USD1.0855.
Against the yen, the dollar was trading lower at JPY146.66 compared to JPY150.00.
Coats Group was down 6.4% at midday on Thursday.
The manufacturer of industrial thread and footwear components set out plans to fully exit from the Performance Materials division's US Yarns business based in North Carolina.
It said the decision follows a strategic review of the operation which started in the fourth quarter. This process has already resulted in the closure of the Toluca, Mexico facility in December. The review concluded that the US Yarns business does not fit with Coats' future strategy.
Coats said the exit from the "non-core" operation will result in a positive annualised impact to both the PM division and group adjusted earnings before interest and tax margins. The exit is expected to complete in the second quarter and is anticipated to generate a modest cash inflow, after closure costs.
K3 Business Technology slumped 6.3%.
The software solutions provider for fashion and apparel brands announced the retirement of Chief Executive Officer Eric Dodd, effective September 30.
It does not intend to name a replacement, on the back of the recent sale of its largest business unit, NexSys Solutions, and the firm's intention to return up to around GBP29 million of the total GBP34.3 million gross proceeds from the disposal to shareholders.
K3 Business is mulling a potential de-listing from London's AIM market, following the return of capital, and intends to consult shareholders on the decision at a general meeting on April 24.
Aurrigo International, on the other hand, is up 3.7%.
The transport technology solutions firm announced the launch of Auto-Cargo, a fully autonomous electric vehicle designed to move heavy cargo loads to and from aircraft.
Its new Auto-Cargo vehicle will be trialled at the UPS hub at East Midlands Airport, the UK's second largest cargo terminal.
Brent oil was quoted at USD71.50 a barrel at midday in London on Thursday, down from USD74.66 late Wednesday.
"While oil, gas, and refined products were exempt from the measures, the broader economic impact weighed on sentiment. If economic activity slows further, crude prices could remain under pressure as energy consumption declines, particularly in industrial and transportation sectors," commented XTB MENA analyst Milad Azar.
"Adding to the bearish outlook, US crude inventories surged by 6.2 million barrels, significantly exceeding expectations. Reduced refinery activity has further dampened near-term consumption expectations. Market attention is also on OPEC+ as excess supply remains a key downside risk."
Still to come on Thursday's economic calendar, US trade balance and initial jobless claims at 1330 BST and the US composite PMI at 1445 BST.
By Emily Parsons, Alliance News reporter
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