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.
Key events
Scotland’s US charm offensive for Tartan Week
Severin Carrell
Scottish political and business leaders are in New York and Washington on a charm offensive linked to the annual Tartan Week festival, hoping to use Scotland’s soft power to dilute Trump’s tariffs and promote a US-UK trade deal, our Scotland editor Severin Carrell reports.
Against the backdrop of the kilt-laden cultural jamboree, John Swinney, Scotland’s first minister, is in New York meeting US investors, hosting a reception with the Scottish Chambers of Commerce and co-hosting a financial services event with the lord mayor of London, Alastair King.
Anas Sarwar, the Scottish Labour leader, was in Washington DC yesterday where he met the UK’s ambassador Peter Mandelson, before heading too to New York. He posted cheery videos on LinkedIn and Instagram with the message: “Diplomacy, dialogue, cool heads and personal relationships are so important.”
Meanwhile the Scottish Chambers of Commerce has signed a “timely” MoU with the New York Chamber of Commerce to “create a bridge” between the two countries linked to Swinney’s trade mission.
Successive first ministers have long used New York’s Tartan Week to promote Scottish interests, and their own. Whisky, Scottish salmon, tourism and inward investment feature heavily.
Trump’s trade wars have given this annual event far greater saliency: the US buys nearly £1bn worth of Scottish whisky a year; Scottish salmon exports (often to Michelin-starred restaurants in New York) brought in £225m last year.
They quietly play on Trump’s significant business and family ties to Scotland – he owns two Scottish golf resorts and occasionally mentions his mother’s birthplace on the Isle of Lewis.
As Swinney put it in a press release this morning:
“It is our largest inward investor and second largest export market, so it is crucial we build on existing relationships to seize future opportunities.”
It remains to be seen how much that soft power can cut through. One senior Scottish industry figure reckons it is superficial, at best:
“The heritage stuff is something to lean into – it’s a link that other nations don’t have – but there is no sense it will help to extricate the UK. It will be a hard headed deal which does, not sentiment.”
The rout in Japanese stocks this week has pushed the Nikkei index to the brink of a full-blown bear market.
The Nikkei 225 index has closed down 2.75% today, which I calculate means it has fallen by 19.996% from its record closing high last July.
A 20% fall would be an official ‘bear market’.
Investors are piling into government bonds again today, pushing up prices and thus lowering yields (the rate of return on the debt).
The yield on US Treasury bills is dropping again today, with 10-year Treasury yields down 10 basis points at 3.95%.
UK government debt is strengthening too, which is lowering the yield on 10-year gilts by 10 basis points to 4.41%.
Falling bond yields are a sign that investors are expecting weaker growth and lower interest rates.
Lower borrowing costs would, on their own, reduce the pressure on chancellor Rachel Reeves to hit her fiscal targets. The problem, though, is that an economic slowdown would hurt tax receipts…
Wall Street future warn of more losses today
The futures market suggests there will be further losses when the New York market opens.
The S&P 500 and the Dow Jones industrial average are on track to drop 0.7%, while Nasdaq future are down 0.5%.
That would add to the hefty losses yesterday, when the S&P 500 slumped 4.8% in its worst session since June 2020, as investors gave their verdict to Donald Trump’s new tariffs.
Paul Donovan, chief economist at UBS Global Wealth Management, says:
Financial markets expected a significant tax increase from US President Trump. Yesterday’s reaction shows the tax increase was worse than anticipated.
US dollar weakness is telling. We often hear that when the US sneezes the global economy catches cold. This is not the US sneezing. This is the US cutting off its own arm. The self-inflicted economic cost naturally weakens the dollar.
The sell-off is gathering pace in London.
The FTSE 100 is now down another 99 points, or 1.17%, to 8375 points, still the lowest since mid-January.
Donald Trump’s son Eric dropped a clanking hint last night about the White House’s trade strategy.
He posted:
I wouldn’t want to be the last country that tries to negotiate a trade deal with @realDonaldTrump. The first to negotiate will win – the last will absolutely lose. I have seen this movie my entire life…
This attracted some criticism from X users, reminding Eric of his father’s multiple bankruptcies.
But there are signs that some companies are keen to negotiate, particulary in Asia which were hit with high new tariffs.
Indonesia, for example, has pledged to ease trade rules. President Prabowo has instructed his cabinet to eliminate regulations that hinder trade, especially those related to Non-Tariff Measures (NTMs), in an attempt to placate the US.
Bangladesh is looking to hold talks with the Trump administration in a bid to lowe the new 37% tariff on its goods, which could hurt its garment export industry badly.
Sk. Bashir Uddin, Bangladesh’s de-facto trade minister, told Bloomberg:
“We’re actively exploring opportunities to reduce the gaps.”
Bloomberg: Billionaires lost $208bn yesterday as stocks plunged
The world’s 500 richest people saw their combined wealth plunge by $208bn yesterday, according to Bloomberg calculations.
The drop is the fourth-largest one-day decline in the Bloomberg Billionaires Index’s 13-year history, and the largest since the height of the Covid-19 pandemic.
The bosses of some of the largest US tech firms saw billions wiped off their wealth.
Meta founder Mark Zuckerberg was the biggest loser in dollar terms, with the social media company’s 9% slide costing its chief executive officer $17.9bn, Bloomberg reports.
Jeff Bezos lost $15.9bn in personal wealth, as Amazon shares plunged 9% yesterday.
Elon Musk lost $11bn, taking his losses so far this year to $110bn.
Oil on track for worst week since October
The oil price is falling again too, putting crude on track for its worst week since last October.
Brent crude is down 1.85% this morning at $68.83 per barrel, the lowest in almost a month, following a 6.4% plunge on Thursday.
Oil is a bellwether of the global economy, so is facing pressure from Trump’s tariffs.
It is also weaker because yesterday the Organisation of the Petroleum Exporting Countries (OPEC) and its allies announced a larger-than-expected production increase.
So far this week, Brent is down 6.5%, which would be the biggest weekly drop since October 2024 (corrected).
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%.
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.
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.
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).
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.
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.”
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.”
