7th Apr 2025 11:51
(Alliance News) - Stock prices in London were in the red at midday on Monday, as leaders globally weigh their responses to US President Donald Trump's tariffs.
The FTSE 100 index was down 307.22 points, 3.8%, at 7,747.76. The FTSE 250 was down 676.28 points, 3.7%, at 17,689.07, and the AIM All-Share was down 21.31 points, 3.3%, at 619.23.
The Cboe UK 100 was down 4.0% at 771.65, the Cboe UK 250 was down 4.0% at 15,404.00, and the Cboe Small Companies was down 0.9% at 14,474.54.
"The FTSE 100 didn't have a single stock in positive territory, which illustrates the severity of the situation," AJ Bell's Russ Mould said. "Economic proxies were hit hard...Tariff-related deals are likely to be high up the list of catalysts to drive a recovery in markets, and the next few weeks are going to be crucial in terms of getting a better idea of the new lay of the land.
"Negotiations may not produce rapid results so there could be prolonged uncertainty and that spells heightened market volatility. Trump will drive a hard bargain and won't back down or soften the blow unless the US gets something big in return."
Entain was the biggest large-cap 'winner' at around midday, down 0.2%. Melrose Industries remained the worst performer, down 7.7%.
Ruffer Investment stayed at the top of the FTSE 250, up 3.7%. At the other end, Victrex lost 8.4%.
Catenai continued to lead AIM, up 29%. At the other end, HC Slingsby dropped 25%.
The Baildon-based industrial equipment supplier swung to a pretax loss of GBP769,000 in 2024, with revenue falling to GBP20.8 million from GBP22.6 million.
Looking ahead, it said: "The market remains competitive, and the board is cautious regarding the outlook.
"There remains uncertainty in the economy due to the risk of a recession in the UK and inflationary pressures in employment and other costs. These pressures could result in a fall in demand for the group's products."
The FTSE 100 dropped by about 5% to a one-year low in early trading as a sharp sell-off kicked in shortly after markets opened, as fears deepen over the global impact of Trump's tariffs despite UK Prime Minister Keir Starmer promising new measures to support under-pressure manufacturers.
Starmer has promised to make a raft of reforms designed to provide "certainty" and "support for industry": under new measures to be announced on Monday, rules around fines for manufacturers who do not sell enough electric cars will be relaxed, and supercar firms will be exempt.
While he will reinstate the 2030 ban on the sale of new petrol and diesel cars, luxury carmakers like Aston Martin and McLaren will still be allowed to keep producing petrol cars beyond that deadline.
Transport Secretary Heidi Alexander said the UK Government has had to look at its electric vehicle plans with "renewed urgency" because of the challenges facing manufacturers.
In European equities on Monday, the CAC 40 in Paris was down 4.4%, while the DAX 40 in Frankfurt was down 4.4%.
Retail sales growth in the eurozone in February outperformed market expectations on an annual basis but was below expectations on a monthly basis, data published by Eurostat showed.
Retail sales climbed 2.3% annually in the eurozone in February, sped up from 1.8% in January and beating FXStreet-cited market consensus of 1.8% on-year growth. On a monthly basis, retail sales growth was 0.3% in February, improving on no change in January but below market consensus of a 0.5% climb.
Separately, Eurostat reported that annual services production growth accelerated to 2.9% in January from 1.7% in December.
Meanwhile, EU ministers will weigh their response to a "paradigm shift" in international trade produced by US tariffs, the bloc's trade chief Maros Sefcovic said.
"What we are going to discuss is how to position Europe in what I would describe as the paradigm shift of the global trading system," Sefcovic told reporters ahead of a meeting in Luxembourg.
However, Irish Trade Minister Simon Harris warned that the EU targeting US tech services in response to the sweeping new tariffs "would be an extraordinary escalation at a time when we must be working for de-escalation".
Ireland relies heavily on US investment, particularly in the pharmaceutical and tech sectors.
The pound was quoted at USD1.2854 at midday on Monday in London, lower compared to USD1.2931 at the equities close on Friday. The euro stood lower at USD1.0990, against USD1.0994. Against the yen, the dollar was trading higher at JPY146.36 compared to JPY145.80.
In Asia on Monday, the Nikkei 225 index in Tokyo closed down 7.8%. The S&P/ASX 200 in Sydney closed down 4.2%. In China, the Shanghai Composite closed down 7.3%, while the Hang Seng index in Hong Kong closed down 14%.
The Hang Seng ended at 19,828.30 after its heftiest drop since 1997 during the Asian financial crisis.
AJ Bell said this made Monday "one of those days that will go down in history", explaining: "We're seeing the biggest falls in Asia because it arguably has the most to lose from Trump's tariffs. Asian countries have thrived from selling goods to the West, with places like the US having been hungry to access cheap labour.
"Asia became a huge manufacturing hub to the US and this situation now threatens to crumble unless Trump backs down or deals can be made to lower tariffs."
Japan meanwhile will present President Donald Trump with a "package" of measures to win relief from US tariffs, Prime Minister Shigeru Ishiba said ahead of a mooted call between the leaders.
Japanese firms are some of the biggest foreign investors into the US but last week Trump announced a hefty 24% levy on imports from the close US ally as part of global "reciprocal" levies.
"We believe that we have to present a package, and we cannot present it on a piecemeal basis," Ishiba said in parliament.
Also, the Japan Business Federation [Keidanren] said on Monday that the world stands at the "crossroads" of whether free trade can be maintained.
"The world has flourished through the free trade system and free trade since the end of World War II. The driving force behind this system is the US," Chair Masakazu Tokura told a press conference. "The US itself has [now] raised tariffs, and protectionist moves have emerged in response because various countries needed to counteract these moves."
Trump has also imposed 25% levies on cars coming into the US. In Japan, the auto sector is a major pillar of the world's fourth-biggest economy, employing about 5.6 million people directly or indirectly.
Stocks in New York were called lower. The Dow Jones Industrial Average was called down 2.3%, the S&P 500 index down 2.1%, and the Nasdaq Composite down 2.2%.
Goldman Sachs warned that the US faces a recession if most of Donald Trump's tariffs take effect.
"The combination of larger tariffs, greater policy uncertainty, declining business and consumer confidence, and messaging from the administration indicating greater willingness to tolerate near-term economic weakness in pursuit of its policies increase downside risk," the investment bank said in a note to clients.
Goldman has lowered its 2025 GDP growth forecast to 0.5% from 1.0% on a fourth quarter over fourth quarter basis, and raised its 12-month recession probability to 45% from 35%.
Brent oil was quoted lower at USD63.65 a barrel at midday in London on Monday from USD65.38 late Friday.
Gold was quoted higher at USD3,034.91 an ounce against USD3,025.91.
Still to come on Monday's economic calendar, there are no significant events scheduled.
By Emma Curzon, Alliance News reporter
Comments and questions to [email protected]
Copyright 2025 Alliance News Ltd. All Rights Reserved.
Related Shares:
EntainMelroseRufferVictrexCatenai PlcSlingsby H.c