Global stocks slump as Trump protectionist threats spark investor jitters
Wall Street stocks also tumbled, with the Dow Jones Industrial average falling 1.7%.
Protectionist threats by the US sent global stocks into the red on Thursday, having sparked jitters over a global trade war.
The FTSE 100 ended the day down 1.2% or 86.38 points at 6,952.59 points, while peers like the French Cac 40 and German Dax slumped 1.4% and 1.7%, respectively.
Wall Street stocks also tumbled, with the Dow Jones Industrial average falling 1.7% and the S&P 500 and NASDAQ Composite down around 1.2% each in the early hours of US trading.
It came as the White House said US president Donald Trump was preparing restrictions on Chinese investment and tariffs to punish Beijing for stealing American technology and putting pressure on US firms.
Fiona Cincotta, senior market analyst at City Index, said: “Trump’s announcement that he will place 50 billion US dollars of tariffs on China over IP theft has sent the markets spiraling lower.
“Fears that it could be harmful to the US economy and fears over the potential retaliation from China have left investors rotating out of stocks into less risky bonds.”
In currency markets, the pound was down nearly 0.2% against the dollar at around 1.411.
Sterling was lifted earlier in the day by stronger than expected UK retail sales data and news that two of seven Bank of England Monetary Policy Committee (MPC) members voted to hike interest rates – which were ultimately kept on hold at 0.5%.
However, warnings by the MPC that a recent bout of snowfall could impact economic growth in the first quarter compounded worries over US protectionism, sending the pound lower.
Versus the euro, the pound was up just 0.05% at 1.146.
Brent crude prices were hit by profit taking, with investors cashing in on a strong rise following an unexpected drop in US crude inventories reported a day earlier.
It sent the global benchmark price of oil down 1.2% at around 68.97 US dollars per barrel.
In UK stocks, Reckitt Benckiser jumped 269p to 5,895p after the firm announced that it had ended talks to acquire Pfizer’s consumer healthcare business.
Investors took the news as a signal that Reckitt will begin focusing on reorganising its own business.
Crest Nicholson dropped 13.4p to 453.8p. It came as nearly a third of its shareholders failed to back boss Stephen Stone’s appointment as executive chairman at its annual general meeting, amid concerns over his planned length of tenure and executive capacity.
Fashion chain Ted Baker plunged 380p to 2,556p after the group said unseasonable weather across the UK and Europe – as well as on the east coast of America – had knocked recent trading.
It also warned over “challenging” conditions in many of its global markets.
Stobart Group shares tumbled 9.5p to 220p on news that it is no longer planning to make a bid for Flybe, having failed to agree “satisfactory terms” with the regional airline.
Last month shares in Flybe rocketed after Stobart said it was weighing a potential approach for the Exeter-based business.
The biggest risers on the FTSE 100 were Reckitt Benckiser up 269p at 5,895p, Coca Cola HBC up 80p at 2,529p, Just Eat up 11.2p at 717.6p, and Smurfit Kappa Group up 42p at 3,036p.
The biggest fallers on the FTSE 100 were Micro Focus International down 60.8p at 911.8p, Schroders down 127p at 3,259p, Rio Tinto down 131p at 3,584p, and Glencore down 11.95p at 359.2p.