The London Stock market crashed more than 5% in “Black Monday” early trading this morning as the shock waves out from Donald Trump’s “nuclear” tariffs policy reverberated around the world.
Within minutes of opening the blue chip FTSE-100 index of leading British companies was down 457.1 points, or 5.65%, at 7,597.88.
It follows a fall of almost 5% on Friday leaving the Footsie at its lowest level since January 2024.
The huge wave of selling wiped billions of pounds from the value of Britain’s leading companies and will savage the pension funds of millions of savers.
It is the biggest slump in share prices in the City since the start of the pandemic just over five years ago.
The biggest since day’s loss in London’ modern stock market history came in the October 1987 crash when the FTSE-100 dropped 22.6% in a day.
The broader based FTSE-250 index of more domestically focussed businesses fell slightly less steeply, by just under 5%, or 914.33 points to 17,451.02.
Leading European bourses were also savaged by the wave of selling with Germany’s DAX down 7.6$, having been 10% lower at the start of trading, while France’s CAC 40 shedding 7%.
The slump in Europe follows heavy falls on Asian market overnight.
Japan’s Nikkei 225 Index fell 7% or 2,361 points to 31,418.89 today having been almost 9% down earlier in the trading session.
Banking shares were particularly badly hit with a bank index down as much as 30% over the past three sessions.
Hong Kong’s Hang Seng Index was hit even harder down 12.5% or 2,860 points at 19,988.85 by mid-afternoon. It was the market’s biggest intra-day decline since the global financial crisis in 2008.
The collapse in Asian markets follows China’s decision to hit back at the US administration with reciprocal tariffs of 34% on US imports sparking fears of a full scale trade war sending the global economy into recession.
Today’s brutal reaction was amplified by the Hong Kong and mainland China markets were closed on Friday for the Ching Ming Festival.
Across region’s markets as a whole the MSCI Asia Pacific index plunged by 8%, the most since the financial crisis.
Traders in London and New York are braced for another turbulent day on the markets after a two-day rout wiped out over $5 trillion in stock values over Thursday and Friday.
The FTSE-100 index is seen opening down another 3% or around 240 points dragging it down well below the 8000 mark to around 7813.
Leading US markets are now expected to be in full bear market territory today indicating a fall of at least 20% from peaks.
The Dow Jones futures point to Wall Street opening about 1000 point down representing a slump of around 2.8%.
But the broader based S&P 500 futures slipped as much as 4% in pre-market trading.
Oil prices also fell on the recession fears with the benchmark price of a barrel of Brent Crude down $2.35, or 3.6% at $63.23.
Billionaire investor nd former Trump supporter Bill Ackman warned America was heading toward a self-inflicted “economic nuclear winter” as a result of the tariff policy.
“By placing massive and disproportionate tariffs on our friends and our enemies alike and thereby launching a global economic war against the whole world at once, we are in the process of destroying confidence in our country as a trading partner,” Ackman, wrote on social media platform X.
But President Trump showed no sign that he was in a mood for backing down when he spoke to reporters on aboard Air Force One on his way back to the White House.
He said: “What’s going to happen with the market? I can’t tell you.
“But I can tell you our country has gotten a lot stronger, and eventually it’ll be a country like no other.”
“I don’t want anything to go down, but sometimes you have to take medicine to fix something,”
Meanwhile accountants KPMG warned the UK economy faces a “material hit” from President Trump’s tariffs. It said growth is on track to slow to just 0.8 per cent this year and next.
This article was written by Jonathan Prynn from The Evening Standard and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.