London close: FTSE slides as Trump ramps up trade war with Canada

(Sharecast News) - London stocks ended firmly in the red on Tuesday after Trump announced the US will double tariffs on Canadian steel and aluminium imports, further rattling markets.

The FTSE 100 closed down 1.2% at 8,495.99.

Donald Trump said in a post on his Truth Social platform that the US would double tariffs on any imported aluminium or steel from Canada to 50%, with effect from Wednesday morning. This is in retaliation for a 25% surcharge that Canadian electricity exporters are placing on power used in a group of US states that share an energy grid with Canada.

Kathleen Brooks, research director at XTB, said: "The tit-for-tat tariff policy that was started by Donald Trump, is bad news for equity market bulls. Back in November, the focus was on the positive impact from Trump's economic policies, however, now they are reality his policies are negative for growth, at least in the short to medium term. Trump's erratic and reactionary trade policy is eroding faith in US exceptionalism and fuelling recession fears.

"There is now a 25% chance of a US recession this quarter, according to Bloomberg's recession monitor, not long ago that threat was negligible. The more tariffs that Trump imposes, and the longer they are in place, then the higher recession odds will become. This is a disaster for US stock markets.

"President Trump's economic policies have been compared to Liz Truss's in recent days. However, while the shock and awe approach to economic policy is similar, the impact is different. Trump's policies are hitting stocks hard and weighing on domestic equity market valuations, in contrast Liz Truss's policies decimated the UK bond market.

"Treasuries are rising on the back of President Trump's economic policies and yields are falling. The market is looking through the risk of a US recession exacerbating the huge budget deficit, for now. However, if economic data does start to deteriorate sharply, then we could see Treasuries also come under pressure."

On home shores, data released earlier by the British Retail Consortium and KPMG showed that retail sales growth slowed again in February as poor fashion sales weighed down non-food spend.

The monthly BRC-KPMG Retail Sales Monitor report showed that UK retail sales rose at a year-on-year rate of 1.1% last month, compared with a 2.6% gain in January and the 3.2% growth registered in December.

However, while this was below the three-month average growth rate of 2.4%, this was still above the 12-month average of 0.8%.

Food sales were 2.3% higher than last February, though non-food sales were flat year-on-year.

"While sales growth across non-food categories was generally muted, it was propped up by online purchases, particularly in computing and electronics. Jewellery, watches and fragrance sold well thanks to Valentine's Day, reversing declines seen last year, and furniture also returned to growth," said Helen Dickinson, chief executive of the BRC.

"Fashion performed poorly due to the gloomy weather throughout the month, but retailers are hopeful the early March sunshine kickstarts spending on Spring and Summer wardrobes."

Looking ahead, Dickinson said retailers will have "little choice" but to raise prices or cut investment ahead of the �7bn in new costs, with higher wage bills, National Insurance contributions and a new packaging levy set to kick in.

"It is time for government to course correct to ensure investment and growth are not undermined," she said.

In equity markets, airlines were in the red, with BA and Iberia owner IAG the worst performer on the FTSE 100 after a profit warning from Delta Airlines. Budget airline easyJet and hotel chain IHG were also weaker.

Spirax Group lost ground even as it said it managed to grow organic revenues across the board in 2024 despite industrial production growth being weaker than expected in the second half.

Infrastructure services firm Kier Group slumped even as it posted a rise in first-half profit and revenue and lifted its dividend, hailing a record order book.

Domino's Pizza fell despite delivering a 3.8% rise in full-year underlying core earnings as customers tucked into special offers in store and online.

On the upside, housebuilder Persimmon gained as it reported a 10% jump in full-year underlying pre-tax profit to �395.1m, comfortably ahead of consensus expectations of �384m, and lifted its annual house building target.

Barratt Redrow, Taylor Wimpey, Berkeley, Crest Nicholson and Bellway also racked up strong gains.

London Stock Exchange Group advanced after Oddo BHF upgraded the shares to 'outperform' from 'neutral'.

Industrial flow equipment manufacturer Rotork rallied after saying it had delivered "another year of strong sales growth and margin progress" and announced a �50m share buyback.

Market Movers

FTSE 100 (UKX) 8,495.99 -1.21%

FTSE 250 (MCX) 19,770.16 -0.53%

techMARK (TASX) 4,708.00 -1.33%

FTSE 100 - Risers

Persimmon (PSN) 1,234.00p 5.43%

London Stock Exchange Group (LSEG) 11,050.00p 3.32%

Rolls-Royce Holdings (RR.) 747.40p 1.99%

Barratt Redrow (BTRW) 434.50p 1.80%

Fresnillo (FRES) 848.00p 1.13%

SEGRO (SGRO) 700.20p 1.10%

Taylor Wimpey (TW.) 113.70p 1.07%

United Utilities Group (UU.) 991.20p 0.98%

Severn Trent (SVT) 2,483.00p 0.89%

Berkeley Group Holdings (The) (BKG) 3,658.00p 0.83%

FTSE 100 - Fallers

International Consolidated Airlines Group SA (CDI) (IAG) 289.70p -6.70%

Rentokil Initial (RTO) 323.40p -4.55%

Diploma (DPLM) 3,998.00p -4.40%

Spirax Group (SPX) 6,720.00p -4.34%

Intertek Group (ITRK) 4,964.00p -3.98%

Standard Chartered (STAN) 1,125.00p -3.89%

InterContinental Hotels Group (IHG) 8,754.00p -3.80%

Vodafone Group (VOD) 71.10p -3.79%

Halma (HLMA) 2,584.00p -3.55%

Schroders (SDR) 389.60p -3.13%

FTSE 250 - Risers

Rotork (ROR) 334.60p 7.04%

Target Healthcare Reit Ltd (THRL) 91.50p 5.41%

Alpha Group International (ALPH) 2,490.00p 4.18%

Bellway (BWY) 2,312.00p 4.14%

Indivior (INDV) 742.00p 3.99%

Crest Nicholson Holdings (CRST) 151.10p 3.78%

Greggs (GRG) 1,919.00p 3.56%

Burberry Group (BRBY) 1,036.50p 3.19%

Pennon Group (PNN) 407.20p 2.98%

Harworth Group (HWG) 165.00p 2.80%

FTSE 250 - Fallers

Kier Group (KIE) 123.80p -11.57%

Dr. Martens (DOCS) 54.15p -4.24%

TBC Bank Group (TBCG) 4,095.00p -4.10%

Ocado Group (OCDO) 238.90p -3.86%

Genuit Group (GEN) 343.50p -3.78%

Domino's Pizza Group (DOM) 282.40p -3.62%

Kainos Group (KNOS) 674.00p -3.30%

Watches of Switzerland Group (WOSG) 445.80p -3.13%

Hill and Smith (HILS) 1,740.00p -2.90%

4Imprint Group (FOUR) 4,790.00p -2.84%