(Sharecast News) - London stocks were still in the red by midday on Thursday, with sentiment hit after Donald Trump announced a new 25% tariff on all imported cars and car parts.
The FTSE 100 was down 0.6% at 8,634.83.
Speaking at the White House on Wednesday, Trump said: "Frankly, friend has been oftentimes much worse than foe. And what we're going to be doing is a 25% tariff on all cars that are not made in the United States.
"If they're made in the United States, it's absolutely no tariff."
Trump also warned the European Union and Canada not to work together "to do economic harm to the US", threatening them with "large-scale tariffs, far larger than currently planned".
On his Truth Social platform, the US President said such tariffs "will be placed on them both in order to protect the best friend that each of those two countries has ever had".
Russ Mould, investment director at AJ Bell, said: "The automotive industry has struck Donald Trump off their Christmas card list after he imposed 25% tariffs on cars and car parts coming into the US from April.
"It has caused shares in auto companies to go into reverse and weighed on financial markets, with Wall Street firmly in the red last night and Europe following suit on Thursday.
"Mexico, Japan, South Korea, Canada and Germany are the biggest suppliers of auto-related products to the US and stand to lose out if Trump doesn't back down. It's another blow to relations between the US and the rest of the world, and a further reason for investors to be gloomy.
"Futures prices imply yet another bad session in the States when markets open for trading later on, meaning American equities are well and truly having a bad year.
"Investors who merrily filled their accounts with US stocks in recent years have had a wake-up call in 2025 that market winners can quickly turn to market losers. That is why diversification is so important in an investment portfolio."
In equity markets, M&G, Schroders, Segro, Taylor Wimpey, Melrose Industries, Aberdeen and OSB Group all fell as they traded without entitlement to the dividend.
Luxury car maker Aston Martin was under the cosh on news of Trump's latest tariffs.
AJ Bell lost ground after saying it has agreed to sell its Platinum SIPP and SSAS business - AJ Bell Platinum - to InvestAcc for up to 25m.
On the upside, Next surged to the top of the FTSE 100 as the retail giant boosted its sales outlook following a strong start to the year, but warned that consumer confidence was set to deteriorate as the year progressed.
The fashion and home retailer said full-price sales in the first eight weeks of the year had been ahead of expectations.
As a result, it has hiked its first-half forecast to 6.5%, having previously guided for sales growth of 3.5%.
However, the retailer - which is known for its cautious outlook - did not upgrade its second-half guidance. Instead it was kept at 3.5%, with Next citing strong comparatives and potentially weakening conditions.
Marks & Spencer and Primark owner AB Foods also gained.
EasyJet flew lower after a downgrade to 'hold' from 'buy' at Deutsche Bank.
Market Movers
FTSE 100 (UKX) 8,634.83 -0.63%
FTSE 250 (MCX) 19,920.20 -0.59%
techMARK (TASX) 4,639.58 -0.67%
FTSE 100 - Risers
Next (NXT) 10,655.00p 6.70%
Marks & Spencer Group (MKS) 346.10p 2.79%
Compass Group (CPG) 2,528.00p 1.28%
Associated British Foods (ABF) 1,928.50p 1.07%
Sainsbury (J) (SBRY) 238.20p 0.68%
Haleon (HLN) 384.50p 0.63%
Coca-Cola Europacific Partners (DI) (CCEP) 6,600.00p 0.61%
Fresnillo (FRES) 946.00p 0.26%
Airtel Africa (AAF) 165.40p 0.18%
Coca-Cola HBC AG (CDI) (CCH) 3,460.00p 0.12%
FTSE 100 - Fallers
M&G (MNG) 203.70p -6.43%
Schroders (SDR) 355.80p -5.02%
Taylor Wimpey (TW.) 107.90p -4.56%
Antofagasta (ANTO) 1,820.50p -3.68%
Melrose Industries (MRO) 510.40p -3.15%
SEGRO (SGRO) 682.00p -2.99%
CRH (CDI) (CRH) 7,282.00p -2.57%
Smith & Nephew (SN.) 1,073.00p -2.45%
Anglo American (AAL) 2,328.50p -2.14%
British American Tobacco (BATS) 3,086.00p -2.06%
FTSE 250 - Risers
Close Brothers Group (CBG) 323.80p 6.16%
Bakkavor Group (BAKK) 182.50p 4.89%
Ocado Group (OCDO) 299.00p 2.93%
Caledonia Investments (CLDN) 3,830.00p 2.13%
Sirius Real Estate Ltd. (SRE) 85.20p 2.04%
Burberry Group (BRBY) 811.80p 1.86%
Ithaca Energy (ITH) 158.50p 1.73%
Wizz Air Holdings (WIZZ) 1,687.00p 1.50%
International Workplace Group (IWG) 181.70p 1.06%
QinetiQ Group (QQ.) 407.00p 0.99%
FTSE 250 - Fallers
OSB Group (OSB) 432.60p -5.38%
Aston Martin Lagonda Global Holdings (AML) 69.65p -5.37%
Abrdn (ABDN) 160.30p -5.06%
Victrex plc (VCT) 894.00p -4.39%
Vistry Group (VTY) 577.00p -4.07%
XPS Pensions Group (XPS) 369.00p -2.64%
TBC Bank Group (TBCG) 4,350.00p -2.25%
Mitchells & Butlers (MAB) 218.50p -2.24%
Oxford Instruments (OXIG) 1,816.00p -2.16%
Fidelity European Trust (FEV) 391.50p -2.13%
7.27 (0.08%)
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