FTSE 100 hits lowest level since January as sell-off continues
The London stock market is open…. and shares are falling again.
The FTSE 100 index, which tracks blue-chip shares in London, has fallen by 59 points, or 0.7%, to 8415 points.
That’s its lowest level since 17 January, adding to Thursday’s 1.5% tumble (which was the biggest one-day fall since last August).
City investors are gloomy again, having watched Wall Street rack up its biggest losses in five years yesterday.
Derren Nathan, head of equity research Hargreaves Lansdown, says:
“Despite months of sabre-rattling by Donald Trump, markets appear to have been unprepared for the depth and breadth of tariffs announced by the White House.
The tech-heavy Nasdaq saw the worst of it, falling nearly 6%, but there were hefty drops amongst the banks, industrials and energy sectors. Traditional defensive havens offered some refuge with gains seen in consumer staples and utilities.
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Updated at 03.17 EDT
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European markets are falling again too.
Germany’s DAX dropped 0.75% at the start of trading, while France’s CAC has lost 0.9% and Spain’s IBEX is down 1.4%.
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Bank shares are leading the faller in London again, on growing fears that the Trump trade war will hurt the global economy.
Standard Chartered, the Asia-Pacific focused lender, has fallen almost 4% in early trading.
They’re followed by Natwest (-3.6%) and Barclays (-3.5%).
Mining stock are falling as well, with copper producer Antofagasta down 3.4%, on expectations that new trade barriers will dent demand for commodities.
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FTSE 100 hits lowest level since January as sell-off continues
The London stock market is open…. and shares are falling again.
The FTSE 100 index, which tracks blue-chip shares in London, has fallen by 59 points, or 0.7%, to 8415 points.
That’s its lowest level since 17 January, adding to Thursday’s 1.5% tumble (which was the biggest one-day fall since last August).
City investors are gloomy again, having watched Wall Street rack up its biggest losses in five years yesterday.
Derren Nathan, head of equity research Hargreaves Lansdown, says:
“Despite months of sabre-rattling by Donald Trump, markets appear to have been unprepared for the depth and breadth of tariffs announced by the White House.
The tech-heavy Nasdaq saw the worst of it, falling nearly 6%, but there were hefty drops amongst the banks, industrials and energy sectors. Traditional defensive havens offered some refuge with gains seen in consumer staples and utilities.
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Updated at 03.17 EDT
City traders raise bets on UK rate cuts this year
Traders in the City of London are ramping up their bets on UK interest rate cuts this year.
The money markets are now pricing in around 74 basis points of cuts by the Bank of England this year. That shows that three more quarter-point rate cuts are almost fully priced in.
A rate cut at the Bank’s next meeting in early May is now an 86% change, up from around 75% yesterday (and a roughly 50:50 chance last week).
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Nissan halts US orders for two SUVs built in Mexico
Carmaker Nissan has decided to stop selling two Mexican-built Infiniti SUVs in the US market, following Donald Trump’s new 25% tariffs on car imports.
New orders for the QX50 and QX55 variants manufactured in Mexico will be paused, Nissan said today.
Nissan said:
“We are reviewing our production and supply chain operations to identify optimal solutions for efficiency and sustainability.”
The company also has inventory at its U.S. retailers that is unaffected by the new tariffs.
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Updated at 02.46 EDT
Treasury minister: We’re disappointed with US tariffs, not very happy
The UK government is pushing back against Donald Trump’s claim overnight that Sir Keir Starmer is “very happy” with the new tariffs set on British exports to the US.
Exchequer secretary to the Treasury James Murray said this morning that the UK was “disappointed” with US tariffs. And while the UK was in a “better position” than other countries because it is on the lowest band of tariffs, it will keep all options on the table, he explained.
Murray told Times Radio:
“The Prime Minister set out his reaction yesterday when he met businesses.
“We’re disappointed at tariffs being imposed globally.”
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Dollar ‘taking it on the chin again’
The US dollar is continuing to fall against a basket of major currencies today, adding to Thursday’s slide.
The US dollar index is down 0.3% today, slipping against both the euro and the Japanese yen.
It’s also dropped 0.8% to a six-month low against the swiss franc.
America’s currency is weakening due to fears that a trade war could lead to a recession, and expectations that the US Federal Reserve could cut interest rates to support growth.
Stephen Innes, managing partner at SPI Asset Management, explains:
“The dollar’s taking it on the chin again as FX markets ramp up pricing for a deeper U.S. recession and a forced Fed pivot. The yen comfortably wears its safe-haven crown, catching a steady bid on every tick lower in US equities.
With U.S. exceptionalism losing its lustre fast and 10-year Treasury yields breaking below 4%, the euro is emerging as a major winner in the tariff sweepstakes. Europe still has stimulus on deck, while Washington is busy swinging the fiscal axe. That divergence is no longer just a macro idea — it’s the trade.”
A chart showing the US dollar index yesterdayA chart showing the US dollar index yesterdayShare
Italy’s foreign minister Antonio Tajani has said the European Union should aim to have new US trade tariffs halved from 20% to 10%, in line with what has been imposed on the UK.
Tajani told Corriere della Sera newspaper.
“In the short run a possible objective would be to halve the announced tariffs.”
“We have to work on it, but (EU Trade) Commissioner (Maros) Sefcovic is the best person to do it.”
As we covered yesterday (here), the White House used a much-criticised formula to come up with its new tariffs rates, based on the size of a country’s trade deficit as a ratio of total trade with the US.
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Indian shares have joined the global sell-off on Friday after having largely weathered the storm in the previous session since the duties on the country were lower than on its peers.
The Nifty 50 fell 1.17% as of 10:51 a.m. IST, while the BSE Sensex was down 0.97%. They dropped a relatively mild 0.4% on Thursday.
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Chinese industry groups have sharply criticised the US tariffs as well as the closing of the de minimis loophole which had allowed low value goods to be imported tax-free. Associated Press reports:
“America’s action crudely destroyed the normal order of trade between the US and China, severely impacted cooperation between global industries, and greatly harmed the rights of consumers, including American citizens,” said a statement from the China Light Industry Association, which represents the interests of light manufacturing businesses.
The tax exemption, which applies to packages valued at $800 or less, has helped China-founded e-commerce companies like Shein and Temu to thrive while cutting into the US retail market.
“We call on the international community to jointly resist this trade bullying, and firmly safeguard an equal and mutually beneficial international trade system.”
The China National Textile and Apparel Council chimed in as well, with a statement Friday saying they “supported the Chinese government’s forceful measures” as the US has “damaged the resilience of the global textile industry’s supply chain.”
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Updated at 01.45 EDT
Here’s an update on the markets, courtesy of Reuters:
As the week draws to a close, there are few signs of easing investor nerves.
US stock futures pointed to further weakness, with Nasdaq futures falling 0.7% while S&P 500 futures lost 0.66%.
That came after S&P 500 companies lost a combined $2.4 trillion in stock market value overnight, their biggest one-day loss since the coronavirus pandemic hit global markets on March 16, 2020, while other Wall Street indexes similarly suffered sharp falls.
EUROSTOXX 50 futures also declined 0.53%, while FTSE futures were down 0.32% and DAX futures 0.52%.
Japan’s Nikkei tumbled 3.4% and was on course to lose nearly 10% for the week, its worst weekly performance since March 2020.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.5% in thin trade, with markets in China, Hong Kong and Taiwan closed for a holiday. The index was set to lose more than 2% for the week.
“If the current slate of tariffs hold, a Q2 or Q3 recession is very possible, as is a bear market,” said David Bahnsen, chief investment officer at The Bahnsen Group.
“The question is, does President Trump seek some sort of off-ramp for these policies if and when we see a bear market in the stock market. We believe Trump will then pivot to focus on the number of companies that are making significant investments in the US, but it’s unclear that would reverse market sentiment.”
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What do businesses around the world say about Trump’s tariffs?
Experts have warned that Donald Trump’s aggressive tariffs will add costs and delays to businesses around the world, potentially triggering a global recession. Guardian reporters asked eight businesses around the world for their reactions. Here’s a flavour:
Ireland
Photograph: Anna Groniecka
“The US market is important to us, but it’s not the be-all and end-all. We’ve invested a lot of time, effort, and money into the US market over the last six years, so it is unfortunate. There are no winners in this,” an Irish whiskey maker told Lisa O’Carroll.
China
“If you’re asking if I know what I’m going to be paying on my three containers arriving from China, I don’t. Neither do our customs brokers. We asked right after the announcement: ‘What’s our duty? So that we can start planning.’ And they’re like: ‘We have no idea,’” a fitness equipment distributor who manufactures on China told Amy Hawkins.
India
“The US is the most important market for India’s shrimp industry,” a shrimp farmer told Hannah Ellis-Petersen. “But now Indian exports will have tariffs of 26%, while other competing countries such as Ecuador will have 10%. This gives a huge advantage to Ecuador and means they will probably replace India as the largest supplier of shrimps to the US market.”
Italy
“We should see in the next 10 days how these new taxes, let’s call them that, will affect new orders and prices, which is the thing that worries us the most,” a Sardinian cheesemaker told Angela Giuffrida.
Read on below:
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US vice-president JD Vance has said he thought the stock market response to Donald Trump’s “could be worse” and faulted critics for taking a short-term view.
US stock markets saw their worst day of trading since 2020 today as investors grappled with the implications of Trump’s sweeping tariffs.
“Look, one bad day in the stock market compared to what President Trump said earlier today – and I think he’s right about this – we’re going to have a booming stock market for a long time because we’re reinvesting in the United States of America,” Vance said in an interview with Newsmax on Thursday evening. “We’re feeling good.”
He also said critics needed to be less short-termist.
That’s fundamentally what this is about, the national security of manufacturing and making the things that we need, from steel to pharmaceuticals.
Photograph: Mark Schiefelbein/APShare
Tokyo’s Nikkei 225 has now lost 3.5%, while the broader Topix index has fallen 4.45%. It’s just after 1pm in Japan.
Photograph: Kazuhiro Nogi/AFP/Getty ImagesShareKate Lyons
Trade tariffs imposed on tiny Australian territories that are either uninhabited or claim to have no trading relationship with the US appear to have been calculated based on erroneous trade data.
The data relates, at least in part, to shipments mislabelled as coming from remote Norfolk Island, or Heard Island and McDonald Islands, instead of their correct countries of origin, the Guardian can reveal.
Among the erroneously-labelled shipments over the past five years from the island territories are shipments of aquarium systems, Timberland boots, wine and parts for a recycling plant.
According to an analysis of US import data and shipping records, multiple shipments of goods were classified as having originated from Norfolk Island or Heard and McDonald islands when neither the company address, nor the port of departure for the shipment, nor the destination port were located in those territories.
In some cases involving Norfolk Island, which is 1,600km north-east of Sydney and has a population of 2,188, the confusion appears to have resulted from the fact that the company’s address or port of departure is Norfolk, UK, or the destination is Norfolk, Virginia in the US, or a company’s registered address in New Hampshire (NH) has been listed instead as Norfolk Island (NI).
Norfolk Island was this week hit with a 29% tariff on its goods – 19 percentage points higher than the rest of Australia – despite having no export relationship with the US.
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Donald Trump’s cumulative tariff hikes amount to about 22%, which would be equivalent to the biggest US tax increase since 1968, according to a note from JPMorgan.
Reuters reports that the bank has raised its risk of global recession to 60%, up from 40% previously, and said the tariff impact could be “magnified by retaliation, supply chain disruptions, and a sentiment shock.”
The note cautions that “sustained restrictive trade policies and reduced immigration flows may impose lasting supply costs that will lower U.S. growth over the long run.”
JPMorgan added that these policy actions could evolve in the coming weeks, that “the US and global expansions stand on solid ground and should be able to withstand a modest-sized shock”.
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Tariffs imposed by US a ‘national crisis’, Japanese PM says
Tariffs imposed on Japanese goods by US President Donald Trump are a “national crisis,” prime minister Shigeru Ishiba has said.
The levies of 24% on Japanese imports “can be called a national crisis and the government is doing its best with all parties,” Ishiba said in parliament.
His comments came as Japanese stock markets dived; as we reported earlier the Nikkei lost 1.8% after opening on Friday, adding to a drop of 2.77% a day earlier.
On Thursday, Japan’s trade minister, Yoji Muto, said the tariffs on Japanese exports were “extremely regrettable” while chief cabinet secretary Yoshimasa Hayashi told reporters the tariffs may contravene World Trade Organization rules and the pair’s trade treaty.
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