London midday: FTSE sharply lower as Trump tariffs rattle markets
By Michele Maatouk
Date: Thursday 03 Apr 2025
(Sharecast News) - London stocks were still sharply lower by midday on Thursday as Donald Trump's more aggressive than expected tariff announcement rattled markets.
The FTSE 100 was down 1.2% at 8,503.01, while sterling was 1.1% higher against the dollar at 1.3154, after the US president announced a range of tariffs on countries around the world, including the UK.
Holding up a large chart detailing the affected countries at a press conference in the White House, the US president announced a new 10% baseline tariffs on all goods imported into the US.
But there was also a range of higher rates for countries that the Trump administration believes have high trade barriers to US imports.
The European Union will be hit with a 20% tariff on top of the 10% baseline. Trump called the bloc "tough traders" who "rip us off. It's so sad to see. It's pathetic".
Japan and South Korea, countries with traditionally good relationships with the US, were hit with reciprocal rates of 24% and 25% respectively. Vietnam was hit with a 46% rate, India with 26% and Thailand with 36%.
China's rate was 34%, which Treasury secretary Scott Bessent said extended to 54% when combined with an earlier 20% rate announced in February. A separate rate of 32% was imposed on Taiwan.
The UK, Brazil and Singapore escaped higher reciprocal taxes, but still got the 10% baseline.
One of the few countries to avoid tariffs entirely was Russia.
The UK said it remained committed to negotiating an economic deal with the US.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: "Trump's bold attempt to reshape international trade has sent shockwaves through global markets. The effects of 'Liberation Day' are being felt far and wide, with Asian markets down overnight, European stocks under pressure in early trading, and US futures pointing to a big drop later today. With tariffs reaching levels unseen in over a century, the US is poised to rake in an additional $600bn in tariff revenue in an optimistic scenario, or put that another way, that'd be a $600bn added cost for businesses or consumers to stomach.
"While economists scramble to predict the impact on inflation and global growth, businesses around the world are getting their first real look at what a tariff-heavy US trade policy means, and this may just be the beginning of a fresh round of tariff drama. Each country now faces the option of negotiating from this starting point, which, in theory, represents the worst-case scenario. A carrot has been dangled, but if countries opt for the stick, retaliation could mean things get worse before they get better. That doesn't make it any easier for businesses to make clear-cut decisions about major investments in their supply chains, so we can expect volatility to stick around for the foreseeable future.
"The UK, meanwhile, may seem to have fared better than some, but its deep ties to the global economy make a slowdown in growth almost unavoidable and the FTSE 100 has been caught up in the global market sell-off. The government is taking a pragmatic approach, hoping for a trade deal that could ease some of the tariff burden. However, with uncertainty looming large, where we go from here is hard to call and markets rarely respond well to uncertainty."
As investors fled to safety, gold prices rallied again, hitting a fresh all-time high just after the announcement before pulling back a touch this morning.
On home shores, a survey from S&P Global showed that growth in private sector activity was lower than previously thought in March but still reached its highest rate in five months.
The composite purchasing managers' index for March rose to 51.5 from 50.5 in February. While this was down from the initial estimate of 52.0 released last week, it was the highest reading since October.
The main reason for the downward revision was lower-than-expected growth in the services industry, with the services PMI revised to 52.5 from the flash estimate of 53.2, though up from 51 in February.
Still, services growth was the highest since August, with new work rising for the first time in three months amid reports of a gradual turnaround in demand conditions and a subsequent improvement in sales pipelines.
In equity markets, Asia-focused bank Standard Chartered was the biggest loser on the FTSE 100, closely followed by HSBC, paper and packaging group Mondi and JD Sports.
Real estate investment group Primary Health Properties rose after saying it has made a £1.5bn takeover proposal for Assura, the developer and manager of GP and primary care buildings.
Electrical retailer Currys surged as it lifted annual earnings guidance after "robust" trading since the start of the year.
Utilities, which are defensive stocks, were the best performers on the FTSE 100, with Severn Trent, United Utilities, SSE and National Grid all higher.
GSK and AstraZeneca also gained as pharmaceutical products were exempt from Trump's tariffs.
Shore Capital analyst, Dr Sean Conroy, said: "It is still somewhat unclear whether the broader reaching 10% baseline tariffs could still be levied against imported drugs and vaccines, in our view. Given the globalised natural of supply chains across the industry, there had likely been some perceived risk to near-term guidance for GSK...and AstraZeneca...who had travelled poorly into 'Liberation Day', along with the broader cohort of large-cap pharmaceutical companies.
"GSK have confirmed to us no changes to their outlooks based on the available information. AZN have outlined they are assessing the implications of this announcement and believe that essential medicines should be exempt but are also actively seeking to mitigate any impact."
Next and Diageo also advanced. Kathleen Brooks, research director at XBT, said: "The impact of US tariffs is shifting the dynamics between UK and European stocks. The UK is subject to 10% tariffs, while the EU is subject to 20%. This could lead to some arbitrage opportunities. For example, in the FTSE 100, Next and Diageo are some of the top performers on Thursday, even though Diageo has a large export market to the US, and Next has a global supply chain. In contrast, in Europe, jewellery maker Pandora and Adidas are both down sharply on Thursday at 11% and 9% respectively.
"This suggests that investors might be favouring UK apparel makers in favour of European brands due to the lower tariff rate in the UK. Added to this, drinks maker Diageo is also outperforming today, and its stock price is up nearly 3%, vs. a 1.4% increase for Pernod Ricard in France. This suggests two things, 1, that the market thinks booze sales could be relatively unscathed by Trump's tariffs, and 2, that UK drinks companies could be better positioned than their European counterparts."
Market Movers
FTSE 100 (UKX) 8,503.01 -1.23%
FTSE 250 (MCX) 19,484.53 -0.84%
techMARK (TASX) 4,591.61 -0.28%
FTSE 100 - Risers
Severn Trent (SVT) 2,626.00p 3.18%
SSE (SSE) 1,622.00p 3.05%
United Utilities Group (UU.) 1,055.00p 3.03%
Marks & Spencer Group (MKS) 374.40p 2.55%
SEGRO (SGRO) 707.40p 2.52%
Land Securities Group (LAND) 564.00p 2.45%
National Grid (NG.) 1,031.00p 2.28%
Unite Group (UTG) 830.00p 2.22%
Diageo (DGE) 2,089.00p 2.05%
LondonMetric Property (LMP) 185.10p 1.98%
FTSE 100 - Fallers
Standard Chartered (STAN) 1,069.00p -7.25%
Mondi (MNDI) 1,101.50p -5.33%
HSBC Holdings (HSBA) 836.30p -5.29%
JD Sports Fashion (JD.) 67.40p -4.99%
Barclays (BARC) 282.55p -4.79%
CRH (CDI) (CRH) 6,602.00p -4.71%
Informa (INF) 723.00p -4.69%
InterContinental Hotels Group (IHG) 8,020.00p -4.66%
Phoenix Group Holdings (PHNX) 547.50p -4.53%
Ashtead Group (AHT) 3,984.00p -4.46%
FTSE 250 - Risers
Currys (CURY) 100.50p 12.98%
Close Brothers Group (CBG) 310.00p 12.16%
Oxford Nanopore Technologies (ONT) 113.00p 8.76%
Pennon Group (PNN) 474.80p 3.49%
B&M European Value Retail S.A. (DI) (BME) 290.30p 3.27%
Spire Healthcare Group (SPI) 189.20p 2.94%
Vistry Group (VTY) 589.00p 2.86%
Travis Perkins (TPK) 516.50p 2.58%
Shaftesbury Capital (SHC) 128.00p 2.48%
Workspace Group (WKP) 424.00p 2.42%
FTSE 250 - Fallers
Watches of Switzerland Group (WOSG) 373.40p -11.81%
VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 389.50p -9.42%
Ithaca Energy (ITH) 146.90p -7.14%
Vietnam Enterprise Investments (DI) (VEIL) 540.00p -7.06%
Burberry Group (BRBY) 718.80p -6.79%
4Imprint Group (FOUR) 3,545.00p -6.59%
Coats Group (COA) 73.20p -5.55%
Investec (INVP) 452.20p -5.40%
Baillie Gifford US Growth Trust (USA) 214.50p -4.67%
Allianz Technology Trust (ATT) 348.00p -4.66%
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN