Belfast Telegraph

Markets rocked as US-China trade tensions heat up

Global markets were also pulled down heavily by the stand-off between the two nations.

Donald Trump’s trade war with China is hitting sentiment (PA)
Donald Trump’s trade war with China is hitting sentiment (PA)

Escalating US-China trade tensions remained in focus on Thursday as the FTSE 100 followed global stock markets into the red, dragged down by the fallout.

London’s top flight shed 63.59 points, or 0.87%, to close at 7,207.41 after the Chinese government threatened to retaliate if US president Donald Trump follows through on plans to ratchet up tariffs later this week.

David Madden, market analyst at CMC Markets UK, said: “The US is set to up the ante, by raising levies and introducing more tariffs on Chinese imports tomorrow, and that has prompted dealers to cut and run.

“Europe is getting hit in the cross-fire because when the two largest economies in the world engage in a trade war, it bodes badly for everyone.”

Other European stock markets were also pulled down heavily by the stand-off between the two nations.

The German Dax fell 1.69% and the French CAC 40 declined 1.93%.

US-China tensions also applied pressure to oil prices, as it weighed on sentiment and sent a barrel of Brent crude down 0.8% to 69 US dollars.

The pound was broadly flat against the US dollar at the London market close as uncertainty over cross-party Brexit talks continues to hold sterling back.

Fiona Cincotta, senior market analyst at City Index, said: “The on-again off-again cross-party talks on Brexit are keeping sterling trade in a narrow range and under pressure.”

The pound was 0.01% up versus the US dollar at 1.301 and 0.3% down against the euro at 1.158.

In stocks, shares in BT dived after the telecoms giant reported a 2% fall in underlying earnings to £7.4bn for the year to March 31.

The firm said it has ramped up targets for the roll-out of ultra-fast broadband as it kept shareholder dividend payouts unchanged despite falling sales and earnings. Its shares fell 8.5p to 210.75p.

Supermarket Morrisons slipped after it said “political and economic uncertainty” was continuing to affect consumer confidence, even after an extension to the Brexit deadline.

Despite the uncertainty, it reported a 2.3% jump in like-for-like sales excluding fuel in the 13 weeks to May 5. Shares fell 1.9p to 211.7p.

At the other end, house-builder Barratt shrugged off Brexit pressures in the property market as it increased its full-year outlook after a strong start to the year.

The UK’s largest house-builder said total forward sales were up 2.4% to £3.4 billion, while weekly net private reservations remained largely stable at 0.79 against 0.8 a year earlier. Its shares rose to the top of the FTSE 100, gaining 14p to close at 600p.

Elsewhere, fashion retailer Superdry finished trading marginally up even as it issued another profit warning on the back of a sales drop in the final quarter.

In the first trading update since founder Julian Dunkerton barged his way on to the board via a shareholder vote, the clothing company said its pre-tax profits will be lower than the current range of market expectations. Shares rose 0.8p to 481p.

The biggest risers on the FTSE 100 were Barratt up 14p to 600p, RSA Insurance up 12p at 546.4p, Imperial Brands up 47p at 2,227.5p and Smith and Nephew up 27p at 1,603p.

The biggest fallers on the FTSE 100 were Centrica down 10.8p at 94.2p, Informa down 36p at 750p, Admiral Group down 89p at 2,043p and ITV down 4.85p at 118.75p.