FTSE tumbles as Donald Trump launches wave of | European Markets

London’s FTSE 100 Index tumbled more than 1% on opening after US President Donald Trump introduced a wave of tariffs and warned the European Union can be subsequent.

The blue chip share index fell 105.8 factors to 8568.2 – a fall of 1.2% – quickly after the London market started trading at 8am.

Mr Trump stated tariffs on imports from Europe had been coming and didn’t rule out imposing tariffs on UK items, however reportedly stated the state of affairs with Britain “can be worked out”.

It follows strikes over the weekend to slap harsh 25% tariffs on Mexico and Canada and one other 10% on China, with Canada fast to retaliate and the others additionally pledging to hit back with their own tariffs.

Asian markets suffered heavy falls in a single day as they had been the primary to react, with Japan’s Nikkei slumping 2.7% and the Cling Seng in Hong Kong 1% decrease, though mainland Chinese language markets stay shut for the Chinese language Lunar New 12 months vacation till Wednesday.

Analysts stated Asian markets had been bracing for volatility set off by a doable trade conflict escalation.

Yeap Jun Rong, market strategist at IG, stated: “The implications for trade restrictions could result in reduced global trade flows, supply chain shifts, which could mean higher costs for businesses, and higher inflation.”

Wall Street ended last week lower, with the S&P 500 falling 0.5% and the Nasdaq composite dropping 0.3%. The indexes posted their first weekly loss in three weeks, and the Dow Jones Industrial Average fell 0.8%.

Nigel Green, CEO of global financial giant deVere Group, said: “The writing was on the wall. This was entirely foreseeable. Yet, too many market participants buried their heads in the sand, convinced that the worst wouldn’t materialise. Now, the consequences are here, and investors need to act – fast.

“Trump’s tariffs are having an impact across asset classes, from equities to bonds to commodities. The bet is that tariffs will stoke inflation and force central banks to maintain or even hike rates. This is a dangerous game.

“Stock markets, particularly in Europe and Asia, suffered significant declines, with investors scrambling to reposition their portfolios. Asian markets bore the brunt, as Hong Kong, Japan, South Korea, and Taiwan posted steep losses. Meanwhile, oil prices surged amid concerns that tariffs on Canada and Mexico could disrupt North America’s energy supply chain, pushing up fuel costs for American consumers.”

Including to the turbulence, cryptocurrencies haven’t been spared. Bitcoin and Ether noticed sharp declines, with the latter experiencing its steepest loss in practically 4 years earlier than partially recovering.

With buyers now bracing for a extended period of volatility, Mr Inexperienced urged those that haven’t but adjusted their portfolios ought to take into account doing so.

He stated: “The markets will remain highly reactive in the coming days and weeks. Investors must position themselves strategically to mitigate risks and seize opportunities as assets reprice.”

He warned that trade-sensitive sectors—together with manufacturing, technology, and shopper items—are anticipated to face sharp changes as corporations reassess provide chains and prices. Mr Inexperienced added: “Traders mustn’t repeat the error of inaction. That is the wake-up call.”

Neil Wilson, an analyst at TipRanks, said Mr Trump’s moves are “much less of a negotiating tactic than a sledgehammer”.

He added: “It appears from the promoting strain that the market underestimated Trump – not for the primary time. However whether or not that is resolved in short order or drags out and spirals is unknown.

“If the tariffs stay in place, it would mean a significant redrawing of trade terms, and currencies will need to adjust to reflect that.”