London close: Stocks slide further as Trump trade war continues
By Josh White
Date: Monday 07 Apr 2025
(Sharecast News) - London stocks fell sharply again on Monday, extending losses as investor sentiment continued to deteriorate in the face of renewed global trade tensions.
The FTSE 100 index plunged 4.38% to close at 7,702.08 points, while the more domestically-focussed FTSE 250 shed 3.27% to finish at 17,765.19 points.
Fears over the economic impact of the sweeping tariffs announced on practically all imports to the US by president Donald Trump were fuelling the global sell-off.
Sterling also weakened alongside equities, with the pound last down 1.31% on the dollar to trade at $1.2718, as it lost 0.93% against the euro, changing hands at €1.1657.
"The global stock market sell-off intensified on Monday after China retaliated against the US with reciprocal tariffs," said IG senior technical analyst Axel Rudolph.
"Some Asian stock indices fell by 10% on the day with the S&P 500 entering bear market territory, with several European indices close on its heels.
"Comments by Kevin Hassett, a senior economic advisor to president Trump, regarding a possible 90-day pause on all tariffs except China, provoked a sharp intraday rally with US and European indices briefly heading into positive territory."
Rudolph noted that selling quickly resumed, however, after the reports were branded as "fake news" by the White House press secretary.
"The CNN 'Greed and Fear Index' hit its lowest level since August 2011, indicating extreme fear in the markets as seen during the 2008 financial crisis.
"Bond yields strongly rallied from last week's lows while the oil price dropped to a four-year low amid global recession fears.
"Even safe haven assets such as gold and Bitcoin declined amid forced selling to cover margin calls."
UK house prices decline further, investor confidence deteriorates in Europe
In economic news, UK house prices declined for a second consecutive month in March, as activity cooled following a surge in transactions ahead of changes to stamp duty.
According to data from lender Halifax, prices fell 0.5% on the month after a 0.2% drop in February.
Annual price growth held steady at 2.8%, but the average home value slipped to £296,699 from £298,274 the previous month.
"The fall in Halifax house prices in March provides further evidence that the boost from buyers rushing to complete home purchases before the rise in stamp duty on 1 April had already run its course and/or had been offset by the weak economy and the recent rises in mortgage rates," said Ashley Webb, UK economist at Capital Economics.
"Overall, we still think house prices will rise by around 3.5% in the year to the fourth quarter and by 4.5% in the year to the fourth quarter of 2026.
"That said, if the increased downside risks to UK GDP growth posed by Trump's tariffs mean interest rates are cut faster than we expect this year, house price growth could be a bit faster."
On the continent, retail sales edged up in the eurozone in February, offering a modest sign of consumer resilience.
Eurostat's flash estimates showed a 0.3% monthly increase in the euro area, with sales up 0.2% across the broader EU.
Year-on-year, retail activity rose by 2.3% in the eurozone and 2.0% in the EU, helped by steady demand for both food and non-food items.
However, optimism in the region was overshadowed by a sharp decline in investor confidence.
Sentix's latest survey revealed eurozone sentiment plunged to -19.5 in April from -2.9 in March, the weakest level since October 2023.
The drop was driven by fears over escalating trade tensions, particularly following new tariffs introduced by US president Donald Trump.
Expectations for future conditions saw one of the steepest monthly declines in the index's history, underscoring mounting uncertainty.
"Many investors have been literally overwhelmed by the developments of the last few days," the Sentix survey read.
"Can we expect a quick solution - a 'deal' - similar to a rapid market recovery after [the Covid-19 pandemic]? We would doubt it.
"Cheap central bank money is only of limited help in this conflict, especially as the inflationary effects of the tariff measures are difficult to assess and are likely to severely limit the central banks' options for action, for the time being."
In Germany, industrial production fell more than forecast in February, largely due to a slump in construction and energy output.
The Federal Statistical Office reported a 1.3% monthly decline, following a 2.0% gain in January.
While output was slightly higher over the prior three months, it remained 4.0% lower than a year earlier.
On the trade front, Germany's surplus widened to €17.7bn as exports rose 1.8% to a 10-month high, outpacing a more modest 0.7% increase in imports.
Melrose slides almost 8% with equity markets a sea of red
On London's equity markets, Melrose Industries dropped 7.86% amid concerns over its significant US exposure.
Dan Coatsworth, investment analyst at AJ Bell, highlighted that the aerospace firm derived almost two-thirds of its revenue from the US and recently expanded its footprint with a new manufacturing facility in San Diego.
Other stocks with substantial US links also came under pressure.
Intermediate Capital Group fell 5.91%, while Scottish Mortgage Investment Trust slumped 7.55% due to its heavy exposure to the US tech sector.
On the FTSE 250, Computacenter and Victrex dropped 6.35% and 8.39% respectively, reflecting broader weakness in firms reliant on US demand.
Recruitment company PageGroup also declined, losing 7.56% as investors grew more concerned about the potential for a global economic slowdown to dampen hiring.
China-related equities were not spared - Fidelity China Special Situations fell 7.14% after Beijing announced retaliatory tariffs of 34% in response to recent US measures, further escalating tensions between the two countries.
International Workplace Group, which operates shared office spaces globally, also slid 8.03%.
Reporting by Josh White for Sharecast.com.
Market Movers
FTSE 100 (UKX) 7,702.08 -4.38%
FTSE 250 (MCX) 17,765.19 -3.27%
techMARK (TASX) 4,173.47 -4.66%
FTSE 100 - Risers
Fresnillo (FRES) 833.50p 1.34%
Flutter Entertainment (DI) (FLTR) 16,160.00p 0.47%
Entain (ENT) 503.20p 0.40%
NATWEST GROUP (NWG) 415.00p 0.39%
Taylor Wimpey (TW.) 103.95p 0.29%
RELX FINANCE BV 3.375% GTD NTS 20/03/33 (BW73) 99.72p 0.00%
Rio Tinto (RIO) 4,233.50p -0.13%
CRH (CDI) (CRH) 6,240.00p -0.86%
easyJet (EZJ) 427.40p -0.95%
Anglo American (AAL) 1,812.80p -1.07%
FTSE 100 - Fallers
Melrose Industries (MRO) 387.40p -7.86%
Relx plc (REL) 3,517.00p -7.84%
The Sage Group (SGE) 1,097.00p -7.74%
Rentokil Initial (RTO) 309.50p -7.42%
London Stock Exchange Group (LSEG) 10,325.00p -7.36%
Intertek Group (ITRK) 4,206.00p -7.36%
Haleon (HLN) 356.60p -7.01%
AstraZeneca (AZN) 10,056.00p -6.96%
Reckitt Benckiser Group (RKT) 4,727.00p -6.61%
Compass Group (CPG) 2,350.00p -6.37%
FTSE 250 - Risers
Mitchells & Butlers (MAB) 214.50p 4.02%
Ruffer Investment Company Ltd Red PTG Pref Shares (RICA) 293.50p 3.35%
RHI Magnesita N.V. (DI) (RHIM) 2,720.00p 3.23%
VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 391.00p 2.76%
CMC Markets (CMCX) 202.50p 2.69%
Plus500 Ltd (DI) (PLUS) 2,660.00p 1.45%
Paragon Banking Group (PAG) 695.50p 1.24%
HGCapital Trust (HGT) 453.50p 1.23%
Close Brothers Group (CBG) 271.40p 1.13%
Wizz Air Holdings (WIZZ) 1,381.00p 1.02%
FTSE 250 - Fallers
Bridgepoint Group (Reg S) (BPT) 247.80p -11.63%
Pagegroup (PAGE) 249.80p -10.66%
Deliveroo Class (ROO) 113.10p -9.38%
Spirent Communications (SPT) 171.20p -8.88%
NB Private Equity Partners Ltd. (NBPE) 1,286.00p -8.79%
Victrex plc (VCT) 722.00p -8.38%
Hays (HAS) 65.45p -8.13%
International Workplace Group (IWG) 154.60p -8.03%
Future (FUTR) 650.00p -7.97%
Safestore Holdings (SAFE) 532.00p -7.24%
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