London close: Stocks fall as China retaliates to latest US tariffs
By Josh White
Date: Wednesday 09 Apr 2025
(Sharecast News) - London stocks fell sharply on Wednesday, with investors reacting to heightened geopolitical tensions after China unveiled retaliatory tariffs in response to a sweeping 104% import charge on Chinese goods announced by US president Donald Trump overnight.
The FTSE 100 index dropped 2.92% to close at 7,679.48 points, while the FTSE 250 lost 2.5% to end the session at 17,890.64 points.
In currency markets, sterling was last up 0.1% on the dollar to trade at $1.2778, while it fell 0.64% against the euro, changing hands at €1.1576.
"The selling in global equities appears to have exhausted itself for the time being," said IG chief market analyst Chris Beauchamp late in the session.
"News that China had responded with retaliatory tariffs of its own failed to stir much of a reaction beyond about 30 minutes of trading, a sign perhaps that for the moment markets have found a low.
"This might just be simple fatigue from all the headlines; it certainly doesn't appear to be a surge in bullish sentiment."
Beauchamp said that according to Trump, it was a "great time" to buy stocks, but quipped that the proof of the pudding was in the eating.
"Volatility is a given from here, but the lessons of 2008 shouldn't be forgotten.
"Even the most savage bear markets can see extended rallies, and until we see some hard data on the impact of tariffs it will be impossible to say that the low is in."
Global tensions tighten further as Beijing responds to Trump
Global economic tensions deepened during the day as China raised tariffs on US goods to 84%, escalating its trade dispute with Washington.
The move came in response to US president Donald Trump's decision to impose sweeping tariffs of 104% on all Chinese imports, a policy that took effect at 0501 BST on Wednesday morning, a mere hours after it was announced.
The latest Chinese measures, up from the 34% previously announced, would begin on Thursday.
Meanwhile, the European Union also launched retaliatory measures against the US, targeting American steel and aluminium exports starting 15 April.
The European Commission criticised the US tariffs as unjustified and harmful, though it signalled willingness to pursue a negotiated resolution.
In Beijing, policymakers met earlier in the global day to consider measures to support the domestic economy in response to the US tariffs.
According to sources cited by Reuters, the discussions involved senior government and regulatory officials focused on economic stimulus and market stability.
Despite the geopolitical tensions, Chinese equity markets were resilient, with indices in Shanghai and Hong Kong both gaining on the day.
A government white paper out of Beijing reiterated China's readiness to counter US actions, while leaving open the possibility of renewed dialogue with Washington.
On home shores, the Bank of England warned that the intensifying trade conflict is heightening risks to global financial stability.
Minutes from recent meetings of the Financial Policy Committee indicated a more fragile risk environment, with policymakers anticipating a greater likelihood of severe market shocks amid weakening global growth.
The central bank noted that while UK households, businesses, and banks remained resilient, the threat of sharp declines in market prices was persisting.
It also highlighted the growing risks tied to the fragmentation of global trade and financial markets, along with rising geopolitical tensions and global sovereign debt concerns.
Across the Atlantic, mortgage activity showed signs of recovery, with applications jumping 20% in the week ended 4 April.
The increase reversed three weeks of declines, driven by a 35% surge in refinancing and a 9% rise in home purchase applications.
According to the Mortgage Bankers Association, the rebound was due to a dip in average mortgage rates to 6.61%, offering a modest reprieve amid broader economic uncertainty.
Pharma, oil stocks fall on geopolitical concerns
On London's equity markets, pharmaceutical giants GSK and AstraZeneca dropped 5.71% and 6.82% respectively, after US president Trump signalled plans for a significant new tariff on pharmaceutical imports.
Oil and gas stocks were among the hardest hit as crude prices fell below $60 a barrel.
BP slid 6.39% and Shell lost 4.2%, while FTSE 250 energy names Diversified Energy, Ithaca Energy, and Harbour Energy dropped between 6.79% and 6.95%, tracking the decline in commodity prices.
Recruitment firm PageGroup shed 2.41% after warning of continued weakness at the start of its new financial year.
The company said its fourth-quarter slowdown had extended into 2025, citing a more unpredictable economic climate that has clouded the outlook.
On the upside, JD Sports Fashion surged 9.53% after reaffirming its profit guidance and announcing a £100m share buyback.
The retailer expects full-year profit before tax and adjusting items to come in between £915m and £935m for the 2025 financial year, with steady growth anticipated into the 2026 period.
Elsewhere, Assura rose 4.96% after rejecting a £1.5bn merger offer from Primary Health Properties, which itself dipped 1.8%.
Assura instead accepted a £1.6bn takeover offer from a consortium led by private equity firms KKR and Stonepeak.
Precious metals miners Fresnillo and Endeavour Mining gained 2.44% and 2.3% respectively, supported by rising gold prices as investors sought safe-haven assets amid growing geopolitical and economic uncertainty.
Reporting by Josh White for Sharecast.com.
Market Movers
FTSE 100 (UKX) 7,679.48 -2.92%
FTSE 250 (MCX) 17,890.64 -2.50%
techMARK (TASX) 4,135.10 -3.67%
FTSE 100 - Risers
JD Sports Fashion (JD.) 69.18p 9.53%
Fresnillo (FRES) 883.00p 2.44%
3i Group (III) 3,600.00p 1.55%
Airtel Africa (AAF) 149.70p 1.35%
Admiral Group (ADM) 2,950.00p 0.41%
BAE Systems (BA.) 1,572.00p 0.35%
RELX FINANCE BV 3.375% GTD NTS 20/03/33 (BW73) 99.72p 0.00%
Antofagasta (ANTO) 1,388.00p -0.11%
Glencore (GLEN) 238.30p -0.17%
Entain (ENT) 515.80p -0.31%
FTSE 100 - Fallers
AstraZeneca (AZN) 9,667.00p -6.82%
BP (BP.) 332.95p -6.01%
GSK (GSK) 1,264.00p -5.71%
Smith & Nephew (SN.) 937.80p -5.43%
CRH (CDI) (CRH) 6,142.00p -5.42%
Persimmon (PSN) 1,084.50p -5.33%
Smurfit Westrock (DI) (SWR) 2,940.00p -5.13%
Melrose Industries (MRO) 383.50p -5.07%
Pershing Square Holdings Ltd NPV (PSH) 3,244.00p -5.04%
Intermediate Capital Group (ICG) 1,569.00p -4.97%
FTSE 250 - Risers
Assura (AGR) 47.50p 5.09%
B&M European Value Retail S.A. (DI) (BME) 284.90p 2.63%
BH Macro Ltd. GBP Shares (BHMG) 395.50p 2.59%
Endeavour Mining (EDV) 1,778.00p 2.30%
Hochschild Mining (HOC) 266.00p 1.99%
RHI Magnesita N.V. (DI) (RHIM) 2,835.00p 0.89%
AO World (AO.) 92.90p 0.65%
Dunelm Group (DNLM) 895.50p 0.62%
Harworth Group (HWG) 163.50p 0.30%
Patria Private Equity Trust (PPET) 510.00p 0.19%
FTSE 250 - Fallers
Bridgepoint Group (Reg S) (BPT) 229.80p -9.53%
Genus (GNS) 1,548.00p -9.26%
International Workplace Group (IWG) 150.00p -7.73%
Ithaca Energy (ITH) 123.20p -6.95%
Harbour Energy (HBR) 157.90p -6.90%
4Imprint Group (FOUR) 3,065.00p -6.84%
Diversified Energy Company (DEC) 807.50p -6.79%
Raspberry PI Holdings (RPI) 416.20p -6.77%
Vistry Group (VTY) 519.40p -6.76%
VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 358.50p -6.26%
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