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Wednesday 25 April 2018

Trade war worries roil markets and keep global stocks in the red

American stock indexes also fell into the red at the start of trading.

US president Donald Trump's administration plans to introduce tariffs on China's imports. (Niall Carson/PA)
US president Donald Trump's administration plans to introduce tariffs on China's imports. (Niall Carson/PA)

By Kalyeena Makortoff, Press Association City Correspondent

Stock markets were roiled by signs of a global trade war, with China poised to retaliate after US president Donald Trump’s administration planned to introduce tariffs on the Asian giant’s imports.

The FTSE 100 ended the day down 0.4% or 30.65 points at 6,921.94, but fared better than European peers including the French Cac 40 and German Dax which fell 1.4% and 1.7%, respectively.

It followed a major drop in Asian stocks overnight, when the Hang Seng Index slumped 2.4% and Japan’s Nikkei 225 tumbled 4.5%.

American stock indexes also fell into the red at the start of trading.

This is only the beginning of the economic standoff between the two largest economies in the world and investors are jittery David Madden, market analyst at CMC Markets

David Madden, a market analyst at CMC Markets, said: “Beijing is hitting back at the US in a measured way, as China looks to impose tariffs on approximately three billion US dollars worth of US imports.

“Given the US will be slapping levies on 50 billion US dollars worth of Chinese imports, it was a fairly tame response from China.

“This is only the beginning of the economic standoff between the two largest economies in the world, and investors are jittery.”

In currency markets, the pound was mixed, rising 0.3% against the US dollar to 1.414 and falling 0.1% versus the euro to 1.144.

Brent crude prices rose 1.5% to around 69.88 US dollars per barrel – its highest level since late January – after Saudi Arabia’s energy minister signalled that Opec production cuts could be extended into 2019.

In UK stocks, Next was up 355p at 4,984p , as investors cheered news that the company maintained its outlook and final dividend despite challenging trading conditions.

The retailer reported an 8.1% drop in annual pre-tax profits for 2017, which its boss described as the toughest year in more than two decades.

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Next profits

News that GlaxoSmithKline pulled out of the race to buy Pfizer’s 20 billion US dollars consumer healthcare business sent shares up 41.8p to 1,315.6p.

The group suggested the deal did not meet its investment criteria.

Smiths Group was the worst performing stock on the FTSE 100, down 67.5p at 1,468.5p as the engineering firm reported a 42% slump in profits, having been knocked by higher research and development spending and the phasing in of a new detection business.

Aviva fell 10.9p to 493.1p after succumbing to shareholder pressure and rowing back on a controversial proposal to cancel £450 million worth of preference shares.

Shares in Indivior tumbled 25.5p to 382.8p as the pharmaceuticals group lost another patent case in the US that could enable rivals to better compete. The ruling relates to a copycat version of Suboxone, used to treat heroin addiction.

FeverTree slumped 150p to 2,807p. It came as one of the mixer maker’s founders – deputy chairman Charles Rolls – offloaded a 2.6% stake in the business worth £82.5 million.

The biggest risers on the FTSE 100 were Next up 355p at 4,984p, Micro Focus International up 44.2p at 956p, Fresnillo 48.5p at 1,208p, and GlaxoSmithKline up 41.8p at 1,315p.

The biggest fallers on the FTSE 100 were Smiths Group down 67.5p at 1,468.5p, Old Mutual down 7.9p at 239p, Intertek Group down 118p at 4,707p, and Rolls-Royce Holdings down 20.4p at 861.2p.

Press Association

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