Markets dive after President Trump’s tariff threats spook investors
Global markets fell sharply after investors were spooked by Donald Trump’s threat to impose hefty tariffs on Chinese goods as the trade war continued to escalate.
The FTSE 100 closed 177.81 points lower at 7,407.06 points at the end of trading on Friday.
More than 90% of FTSE 100 stocks closed Friday’s trading session in the red as they were left reeling by the President’s announcement late on Thursday.
Michael Hewson, chief market analyst at CMC Markets UK, said: “It’s been another bad day for European markets with the FTSE 100 down for the fourth day in succession while the rest of Europe has also posted large weekly losses, after President Trump threw all the trade chess pieces up into the air.”
Connor Campbell, financial analyst at Spreadex, added: “The UK index has suffered quite the comedown this week.
“Sterling’s slide and the merger-boosted performances of Just Eat and LSE had pushed it above 7,700, a level last seen around a year ago – now it is struggling to hold above a two-month low of 7,400.”
The European markets posted huge declines after President Trump’s announcement, with both the French and German markets sliding deep into the red.
The German Dax plunged by 3.11% and the French Cac fell by 3.57%.
The Dow Jones opened sharply lower following on from the weakness seen in the European markets as traders remained nervous about tensions with China.
Sterling was fairly subdued as it rounded off an awful week which saw it hit two-year lows against the dollar and euro, marginally in the black against the US currency.
The pound was 0.17% up at 1.213 versus the US dollar, and down 0.08% at 1.092 against the euro.
There were only six stocks that closed out the day up, with British Airways owner IAG leading the way.
Shares at IAG closed up 34.7p at 448.2p after bosses revealed a strong Easter and better-than-expected pretax profits, up 19% to £843 million in the three months to June.
At the bottom end, the biggest faller was Royal Bank of Scotland, despite the Government-controlled bank unveiling a bumper £1.7 billion payout for shareholders – including the taxman. RBS shares closed down 14.2p at 202.9p.
Pets at Home shares closed up 0.6p at 216.2p after the company announced a 9.9% jump in sales in the 16 weeks to July 18 as the boss revealed that Brexit planning was well under way, and any recession is unlikely to hit the business.
BT saw shares slide after it reported a dip in sales and profits during the first quarter.
It closed 7.9p lower at 186.2p after it also posted revenue which was down 1% to £5.6 billion in the three months to June 30.
The price of oil rebounded somewhat on Friday after Thursday’s major slump in the price of crude.
The price of a barrel of Brent crude oil rose by 1.62% to 61.98 US dollars (£51.05).
The biggest risers on the FTSE 100 were IAG, up 34.7p at 448.2p, Fresnillo, up 5.2p at 611p, Flutter, up 48p at 6,546p, and Astrazeneca, up 40p at 7,240p.
The biggest fallers on the FTSE 100 were Royal Bank of Scotland, down 14.2p at 202.9p, Antofagasta, down 56.4p at 846p, Melrose Industries, down 11.8p at 179.3p, and Prudential, down 104.5p at 1,600.5p.