London close: Stocks weaker ahead of Trump's tariff deadline
London stocks closed lower on Monday, with investors rattled by fresh trade tensions after Donald Trump threatened to impose reciprocal tariffs on “all countries”.
The FTSE 100 index fell 0.88% to 8,582.81 points, while the FTSE 250 dropped 1.96% to 19,475.48 points.
In currency markets, sterling was last down 0.26% on the dollar to trade at $1.2906, as it slipped 0.06% against the euro, changing hands at €1.1947.
“It is proving to be a very gloomy start to the final day of first quarter trading, as Friday’s selling continues into the new week,” said IG chief market analyst Chris Beauchamp earlier.
“While there has been some buying at the lows, the nearness of the 2 April tariff announcement means that even the most enthusiastic bargain hunters may opt to do nothing for the time being.”
Beauchamp said oil prices looked set to join in the risk-off mood, but made a dramatic turnaround thanks to indications of more solid US demand, and president Trump’s rhetoric about imposing sanctions on Russian oil.
“Of course, higher oil prices won’t help the deflation argument, and if the US does ultimately follow through with action against Iran much of the weakness in crude since the beginning of the year will be unwound.”
Markets under pressure ahead of Trump tariffs, UK mortgage activity weakens
Global markets came under renewed pressure on Monday after US president Donald Trump escalated trade tensions, vowing to impose tariffs on nearly all trading partners.
The prospect of sweeping levies, which Trump signalled would be announced on 2 April as part of what he called “Liberation Day,” triggered a sell-off in equities and pushed gold prices to record highs as investors fled to safe-haven assets.
Trump’s call for more aggressive tariff plans has raised concerns about the potential for a US recession.
According to the Wall Street Journal, the administration was preparing measures that would expand tariffs across a broader set of imports, including a proposed 25% duty on automobiles and parts.
Goldman Sachs responded by raising the probability of a US recession within the next 12 months to 35%, up from 20%, citing deteriorating business and consumer sentiment and the White House’s apparent readiness to accept slower growth.
The bank lowered its US GDP forecast for 2025 to 1.0% and now expected three interest rate cuts this year, beginning in July, as it anticipated unemployment would rise to 4.5% by year-end.
In Germany, retail sales rose 0.8% month-on-month in February, while annual growth reached 4.9% in real terms.
Both food and non-food categories saw gains, suggesting underlying resilience in consumer spending.
However, inflationary pressures could be resurfacing, with import prices rising 3.6% on the year, the sharpest increase since early 2023.
On home shores, mortgage activity in the UK weakened for the second consecutive month in February.
The Bank of England reported 65,500 mortgage approvals for house purchases, down from 66,100 in January and below market expectations.
Approvals for remortgaging also fell, while overall net mortgage lending declined by 0.9% to £3.3bn.
Consumer credit borrowing slipped as well, with credit card borrowing easing to £0.8bn from £1.1bn, reflecting a more cautious stance by households.
Meanwhile, in the United States, business conditions in the Chicago area showed tentative signs of stabilising.
The ISM Chicago Business Barometer rose to 47.6 in March, its highest reading since November 2023 and well above expectations.
While still below the neutral 50 mark, the improvement hinted at a possible softening of the recent downturn in regional manufacturing and services activity.
Wood Group plunges, investors turn to defensive stocks
On London’s equity markets, John Wood Group plunged 33% after announcing it would suspend trading in its shares at the end of April to allow more time to complete its financial results.
The company cited “material weaknesses and failures” in the financial culture of its projects unit and said significant prior-year adjustments would be needed for 2022, 2023, and the first half of 2024.
Pets at Home slumped 8.46% after warning that profits were expected to fall next year due to rising costs and economic uncertainty.
Close Brothers Group dropped 7.2% ahead of a key Supreme Court hearing on the legality of undisclosed commission payments in car financing.
International Consolidated Airlines Group fell 7.52%, tracking broader weakness in cyclical stocks, while miners were also under heavy pressure.
Glencore shed 4.19%, Anglo American dropped 5.04%, Antofagasta lost 3.57%, and Rio Tinto declined 3.98%, as investor appetite for risk assets waned.
Associated British Foods slipped 2% following the immediate resignation of Paul Marchant as chief executive officer of its Primark division after a complaint about his behaviour in a social setting.
The group said the complaint, which prompted an external legal investigation, did not clarify whether the complainant was an employee or a third party.
Finance director Eoin Tonge was named interim CEO.
In contrast, defensive stocks provided some support.
Severn Trent rose 1.49% and United Utilities added 0.94%, while tobacco groups Imperial Brands and British American Tobacco gained 1.17% and 1.6% respectively, as investors rotated into traditionally stable sectors.
Aston Martin Lagonda surged 7.05% after announcing a fresh £52.5m investment from chairman Lawrence Stroll’s Yew Tree Consortium, which would increase its stake in the luxury carmaker.
Reporting by Josh White for Sharecast.com.
Market Movers
FTSE 100 (UKX) 8,582.81 -0.88%
FTSE 250 (MCX) 19,475.48 -1.96%
techMARK (TASX) 4,607.28 -1.11%
FTSE 100 - Risers
British American Tobacco (BATS) 3,182.00p 1.86%
Severn Trent (SVT) 2,531.00p 1.40%
Imperial Brands (IMB) 2,865.00p 1.38%
Smith & Nephew (SN.) 1,085.00p 1.31%
Shell (SHEL) 2,825.00p 1.02%
Beazley (BEZ) 927.00p 0.98%
Airtel Africa (AAF) 165.60p 0.91%
Next (NXT) 11,085.00p 0.86%
Kingfisher (KGF) 253.30p 0.72%
Admiral Group (ADM) 2,850.00p 0.53%
FTSE 100 - Fallers
International Consolidated Airlines Group SA (CDI) (IAG) 260.80p -6.62%
Entain (ENT) 577.80p -5.65%
JD Sports Fashion (JD.) 67.72p -5.64%
Anglo American (AAL) 2,145.00p -4.81%
Flutter Entertainment (DI) (FLTR) 16,950.00p -4.75%
Glencore (GLEN) 280.30p -4.19%
easyJet (EZJ) 442.30p -3.74%
Antofagasta (ANTO) 1,668.50p -3.67%
Spirax Group (SPX) 6,180.00p -3.66%
Melrose Industries (MRO) 475.10p -3.57%
FTSE 250 - Risers
Aston Martin Lagonda Global Holdings (AML) 69.85p 7.05%
Moonpig Group (MOON) 210.00p 1.69%
Harbour Energy (HBR) 210.30p 1.40%
W.A.G Payment Solutions (WPS) 59.80p 1.01%
PRS Reit (The) (PRSR) 115.60p 0.87%
Diversified Energy Company (DEC) 1,043.00p 0.77%
Foresight Environmental Infrastructure Limited (FGEN) 71.50p 0.70%
BH Macro Ltd. GBP Shares (BHMG) 375.00p 0.67%
Energean (ENOG) 873.00p 0.63%
C&C Group (CDI) (CCR) 129.20p 0.62%
FTSE 250 - Fallers
Pets at Home Group (PETS) 216.40p -8.46%
Close Brothers Group (CBG) 278.20p -7.20%
Raspberry PI Holdings (RPI) 466.60p -6.27%
Mobico Group (MCG) 58.15p -6.06%
Wizz Air Holdings (WIZZ) 1,490.00p -5.90%
Ferrexpo (FXPO) 55.00p -5.82%
Quilter (QLT) 147.40p -5.39%
IP Group (IPO) 40.60p -5.36%
Trustpilot Group (TRST) 221.00p -5.35%
Pagegroup (PAGE) 303.80p -5.18%