Global market turmoil, fueled by escalating US-China trade tensions and new tariffs imposed by the European Union, sent the FTSE 100 spiraling downwards. The index reached a 14-month low, reflecting widespread investor anxiety and significant losses across various sectors, particularly pharmaceuticals and energy.
- The FTSE 100 fell 2.9% to a 14-month low near 7,680.
- This drop was triggered by China’s retaliatory 84% tariff on US goods, in response to new US import duties. Some Chinese goods now face tariffs as high as 104%.
- The European Union approved tariffs targeting around €21 billion ($23.2 billion) of US goods.
- AstraZeneca and GSK shares fell sharply, by 6.8% and 5.7% respectively, following President Trump’s indication of potential tariffs on the pharmaceutical sector.
- Oil giants Shell and BP experienced significant losses, down 4.3% and 6% respectively, as crude oil prices dipped below $60.
- JD Sports issued a trading update without addressing the potential risks posed by US tariffs, despite having significant exposure to the American market.
This points to a challenging environment for the asset. Heightened trade tensions and the imposition of tariffs can negatively impact market sentiment and corporate earnings. Specific sectors, such as pharmaceuticals and energy, may face increased pressure due to policy changes and fluctuations in commodity prices. While some companies may appear resilient, the broader economic uncertainty could pose risks, particularly for those with significant international exposure.