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London open: Stocks slide on Trump tariff worries
London stocks slid in early trade on Monday after US President Donald Trump announced over the weekend that he will be imposing 25% tariffs on imports from Canada and Mexico, and an additional 10% tariff on China.
At 0822 GMT, the FTSE 100 was down 1.3% at 8,563.32.
Trump also said over the weekend that tariffs on the European Union “will definitely happen”. He said Britain is “out of line” when it comes to trade and that tariffs “might happen” but “that one can be worked out”.
Chris Beauchamp, chief market analyst at online trading platform IG, said: “It looks to be a grim morning for European investors as stocks across the continent join in the general market rout. We can expect investors to sell first and ask questions later, and the urge to book profits and take cover is likely to be overwhelming.
“Hiding places are likely to be few and far between, and for the moment it looks like the dollar is the only winner.
“The weekend’s news certainly puts paid to the idea that tariffs would just be a negotiating tool. Canada has already responded, and we can expect Mexico and China to take action too. The outlook for global equities just got much gloomier.
“Over the next few days, we will probably see some sectors begin to recover slightly, most obviously those where export exposure to the US is lower than others. The cost of doing business with the world’s largest and strongest economy is only likely to go up from here, taking down margins with it.
“Cheaper valuations in Europe might mean that indices manage to stabilise earlier than in the US, but that will be little comfort to investors in coming days.”
In equity markets, heavily-weighted miners were among the worst performers as metals prices fell, with Antofagasta, Anglo American and Glencore all lower.
Barclays was also under the cosh after customers were locked out of their accounts on Friday and Saturday due to an IT glitch.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Bt Group Plc | +0.42% | +0.60 | 142.50 |
| 2 |  |
Imperial Brands Plc | +0.40% | +11.00 | 2,732.00 |
| 3 |  |
Bae Systems Plc | +0.12% | +1.50 | 1,225.50 |
| 4 |  |
Coca-cola Hbc Ag | +0.07% | +2.00 | 2,812.00 |
| 5 |  |
Intermediate Capital Group Plc | +0.00% | +0.00 | 2,124.00 |
| 6 |  |
Gen.acc.8se.pf | +0.00% | +0.00 | 132.25 |
| 7 |  |
Tui Ag | +0.00% | +0.00 | 563.50 |
| 8 |  |
Sant Uk.8fepf | +0.00% | +0.00 | 133.00 |
| 9 |  |
Bp 8%pf | +0.00% | +0.00 | 131.50 |
| 10 |  |
Bp 9% 2nd Prf | +0.00% | +0.00 | 149.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Scottish Mortgage Investment Trust Plc | -4.47% | -48.50 | 1,037.00 |
| 2 |  |
Antofagasta Plc | -3.59% | -62.00 | 1,663.00 |
| 3 |  |
Intermediate Capital Group Plc | -3.29% | -78.00 | 2,292.00 |
| 4 |  |
Segro Plc | -3.23% | -23.20 | 694.20 |
| 5 |  |
Glencore Plc | -3.18% | -11.15 | 339.35 |
| 6 |  |
Aib Group Plc | -3.12% | -15.00 | 465.50 |
| 7 |  |
South32 Limited | -3.07% | -5.20 | 164.00 |
| 8 |  |
Pershing Square Holdings Ltd | -2.99% | -128.00 | 4,154.00 |
| 9 |  |
Weir Group Plc | -2.97% | -72.00 | 2,354.00 |
| 10 |  |
Anglo American Plc | -2.96% | -70.50 | 2,310.00 |
US close: Stocks lower following December PCE reading
Wall Street stocks closed lower on Friday despite a slightly better-than-expected US consumption reading.
At the close, the Dow Jones Industrial Average was down 0.75% at 44,544.66, while the S&P 500 lost 0.50% to 6,040.53, and the Nasdaq Composite was 0.28% weaker at 19,627.44.
In the background, the US dollar and gold futures were higher amid reports that the White House was set to impose 25% tariffs on Canada and Mexico on Saturday.
West Texas crude oil futures were down 0.28% to $72.53 a barrel and the yield on the benchmark 10-year Treasury note was more than two basis points higher at 4.541%.
On the macro front, the Department of Commerce revealed personal consumption expenditures jumped in December by 0.7% month-on-month (consensus: 0.6%). Core PCE, the Fed’s preferred inflation gauge, price gains were steady at 2.8% year-on-year. The three and six-month core PCE measures, however, continued to move lower.
In the corporate space, Apple shares were down 0.67% at the close of trading despite the tech giant beating profit forecasts with its latest set of quarterly results.
Monday newspaper round-up: Zero-hours contracts, Barclays, Asos
Hundreds of thousands of British workers are on zero-hours contracts despite being with the same employer for years, according to analysis from the TUC. The majority of zero-hours contract workers have been with their employer for more than 12 months, while one in eight have not been granted regular employment rights after more than a decade working in the same place, the organisation said. – Guardian
Barclays says it has fixed the IT glitch that left thousands of customers locked out of their accounts on Friday and Saturday, and promised to compensate them for any losses incurred. The bank said customers could use its payment apps and online services, although some still faced a wait on Sunday to check updated balances and whether payments had been processed. – Guardian
Britain’s growth outlook has been slashed for 2025 as the economy struggles with tax hikes, high borrowing costs and a slump in business confidence. The UK’s GDP will grow by just 1pc this year, according to the EY Item Club, down from previous forecasts of 1.5pc after the economy ground to a halt over winter. – Telegraph
The US Federal Reserve could be forced to delay further interest rate cuts for 18 months due to President Trump’s imposition of tariffs on Canada, Mexico and China, leading economists have warned. On Saturday, Trump said that a tariff of 25 per cent on Canadian and Mexican imports and an additional 10 per cent tax on Chinese goods would come into force on Tuesday. Energy imports from Canada would face a lower 10 per cent levy. – The Times
Two leading credit insurers have reinstated cover for Asos clothing suppliers, signalling renewed confidence in the online fashion retailer’s financial stability. Atradius and Coface restored cover last month having withdrawn it in 2023 amid concerns over the fashion retailer’s tumbling profits, The Times understands. – The Times
