London close: Stocks lower on Trump's latest tariff surprise

(Sharecast News) - London stocks ended lower on Thursday as investor sentiment weakened following a surprise announcement by Donald Trump of a new 25% tariff on all imported cars and car parts.

The move raised concerns over potential trade disruptions and added to global market unease.

At the close, the FTSE 100 was down 0.27% at 8,666.12 points, while the FTSE 250 fell 0.62% to 19,914.70 points.

In currency markets, sterling was last up 0.54% on the dollar to trade at $1.2958, as it rose 0.15% against the euro, changing hands at �1.2004.

Patrick Munnelly, market strategy partner at TickMill Group, noted that luxury carmaker Aston Martin plunged to a record low during the session, following president Trump's announcement of new tariffs on all imported vehicles and auto components.

"On Wednesday evening, Trump disclosed plans to impose a 25% tariff on imported cars and light trucks starting next week, intensifying concerns over the global trade tensions he reignited earlier this year after returning to the White House," he said.

"UK finance minister Rachel Reeves stated that Britain is actively negotiating with Washington to secure an exemption for the country from the proposed tariffs."

She also hinted at the possibility of reassessing subsidies currently benefiting Elon Musk's Tesla, Munnelly pointed out, in a bid to bolster domestic manufacturers.

"Meanwhile, industry data revealed a decline in UK vehicle production, including electric and hybrid models, in February, underscoring the persistent challenges facing the automotive sector amid mounting global economic uncertainties."

Global sentiment deteriorates on Trump's latest tariff surprise

In economic news, global sentiment deteriorated following a sharp escalation in trade tensions, as US president Donald Trump announced a sweeping 25% tariff on all vehicle imports and parts.

The decision, made just days before other levies were set to take effect, rattled automaker stocks worldwide and drew swift condemnation from major exporting nations.

Japan, the world's second-largest car exporter, pledged to consider "all options" in response, while Canadian prime minister Mark Carney described the move as a "direct attack".

European Commission president Ursula von der Leyen warned the tariffs would harm businesses and consumers on both sides of the Atlantic.

Trump later threatened even broader measures if the EU and Canada coordinated a response, referring to the two as a threat to "the best friend that each of those two countries has ever had", apparently conflating the EU with a single nation.

Meanwhile, US economic data presented a mixed picture.

Initial jobless claims edged down by 1,000 to 224,000 last week, slightly below expectations and consistent with a still-tight labor market.

Continuing claims also declined, and the four-week moving average fell to its lowest level since January.

Claims from federal employees dropped modestly, though recent government layoffs were not yet fully reflected due to severance-related delays in filings.

In housing, US pending home sales rose by 2.0% in February, outperforming expectations but remaining well below long-term norms.

The National Association of Realtors said lower mortgage rates could help revive both demand and supply, with forecasts pointing to stronger housing activity in 2025 and 2026.

Nonetheless, affordability pressures and high borrowing costs continued to weigh on the market.

On home shores, UK car production recorded its 12th consecutive monthly decline in February, falling 11.6% year-on-year to 82,178 units.

The Society of Motor Manufacturers and Traders blamed model changeovers and plant restructuring, alongside weakening demand in the UK, EU, and China.

Although exports to the US jumped by over a third, Trump's tariff announcement has raised fears that the boost could be short-lived.

The SMMT also criticised the government's Spring statement, calling it a missed opportunity to support a struggling industry.

"The market transition is not keeping pace with ambition and, while the industry can deliver growth - and green growth at that - it needs policies to deliver that reality," said SMMT chief executive Mike Hawes.

"It was disappointing to hear a spring statement that did nothing to alleviate the pressure on manufacturers and, moreover, confirms the introduction next month of additional fiscal measures which will actually dissuade consumers from investing.

"Without substantive regulatory easements our manufacturing viability remains at risk and the UK's transition to zero emission mobility under threat."

Ex-divs drag on market, Next jumps after raising sales forecast

On London's equity markets, M&G dropped 5.65%, leading a group of dividend-related fallers that included Schroders, down 4.27%; Segro, off 3.19%; Taylor Wimpey, which lost 4.87%; Melrose Industries, down 2.2%; Aberdeen Group, which fell 5.3%; and OSB Group, off 4.59%.

All seven stocks traded without entitlement to their latest dividend, a common factor behind sharp one-day declines.

Luxury carmaker Aston Martin Lagonda slid 5.91% as investors reacted to the announcement of new US tariffs on imported vehicles and parts.

The stock was among the hardest hit in the wake of heightened trade tensions.

AJ Bell lost 1.78% after announcing the sale of its Platinum SIPP and SSAS business to InvestAcc for up to �25m.

The move was said to be part of a strategic reshaping of its offerings.

Budget airline easyJet declined 1.69% after Deutsche Bank downgraded the stock from 'buy' to 'hold', citing limited upside in the near term.

On the upside, retailer Next surged 10.35% after raising its first-half sales forecast following a stronger-than-expected start to the year.

Full-price sales in the first eight weeks exceeded projections, prompting an upgrade to 6.5% growth, up from 3.5%.

However, the company maintained its cautious stance, keeping second-half guidance unchanged due to potential consumer headwinds.

Marks & Spencer rose 2.76%, while Associated British Foods, owner of Primark, added 0.71%, both benefiting from broader optimism in the retail sector.

Elsewhere, Close Brothers Group rallied 8.59% after KBW reiterated an 'outperform' rating and noted the company's stronger-than-expected capital position.

Analysts said the group could immediately absorb a potential �400 million liability tied to motor finance redress without breaching capital buffers.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,666.12 -0.27%

FTSE 250 (MCX) 19,914.70 -0.62%

techMARK (TASX) 4,646.30 -0.53%

FTSE 100 - Risers

Next (NXT) 11,035.00p 10.50%

Marks & Spencer Group (MKS) 348.30p 3.45%

Compass Group (CPG) 2,565.00p 2.76%

Associated British Foods (ABF) 1,945.00p 1.94%

Beazley (BEZ) 912.00p 1.50%

Kingfisher (KGF) 248.10p 1.47%

Hiscox Limited (DI) (HSX) 1,198.00p 1.18%

Imperial Brands (IMB) 2,776.00p 0.95%

Coca-Cola Europacific Partners (DI) (CCEP) 6,620.00p 0.91%

Lloyds Banking Group (LLOY) 74.00p 0.87%

FTSE 100 - Fallers

Antofagasta (ANTO) 1,777.50p -5.95%

M&G (MNG) 205.60p -5.56%

Taylor Wimpey (TW.) 108.05p -4.42%

CRH (CDI) (CRH) 7,150.00p -4.34%

Schroders (SDR) 358.60p -4.27%

SEGRO (SGRO) 680.60p -3.19%

Smith & Nephew (SN.) 1,067.00p -3.00%

Anglo American (AAL) 2,322.00p -2.42%

Standard Chartered (STAN) 1,161.50p -2.15%

Glencore (GLEN) 297.65p -2.09%

FTSE 250 - Risers

Close Brothers Group (CBG) 330.80p 8.46%

Bakkavor Group (BAKK) 182.00p 4.60%

International Workplace Group (IWG) 186.80p 3.89%

Burberry Group (BRBY) 824.20p 3.41%

Moonpig Group (MOON) 210.50p 2.93%

Auction Technology Group (ATG) 597.00p 2.93%

Ithaca Energy (ITH) 160.20p 2.82%

Sirius Real Estate Ltd. (SRE) 85.45p 2.34%

Hochschild Mining (HOC) 266.50p 2.30%

Endeavour Mining (EDV) 1,787.00p 1.82%

FTSE 250 - Fallers

Aston Martin Lagonda Global Holdings (AML) 68.70p -6.66%

Victrex plc (VCT) 880.00p -5.88%

Abrdn (ABDN) 159.75p -5.39%

OSB Group (OSB) 432.80p -5.34%

Vistry Group (VTY) 576.00p -4.24%

Hill and Smith (HILS) 1,846.00p -3.55%

Caledonia Investments (CLDN) 3,620.00p -3.47%

Foresight Group Holdings Limited NPV (FSG) 359.00p -3.23%

TBC Bank Group (TBCG) 4,325.00p -2.81%

Genus (GNS) 1,896.00p -2.77%