London midday: Stocks in freefall as China retaliates, trade war escalates

(Sharecast News) - London stocks were in freefall by midday on Friday as Trump's trade war escalated after China said it would impose additional tariffs of 34% on US imports.

The FTSE 100 was down 3.5%. European stocks fared even worse, with the benchmark Stoxx 600 index down 4.1%, while Germany's DAX and France's CAC were off 4.3% and 3.8% respectively.

China, which is facing a 54% tariffs on its exports to the US, said the tariffs would be imposed from 10 April.

Investors were also mulling comments from International Monetary Fund chief Kristalina Georgieva, who said that US tariffs were "a significant risk to the global outlook".

She said in a statement that it was "important to avoid steps that could further harm the world economy" and appealed to the US and its trading partners "to work constructively to resolve trade tensions and reduce uncertainty".

Russ Mould, investment director at AJ Bell, said: "With markets having suffered their worst week in five years, investors were hiding under their duvet on Friday hoping the pain would go away.

"Unfortunately, the relentless selling continued, with markets falling across Asia and Europe and futures prices implying the US will do the same when trading begins later on.

"There are so many moving parts that getting your head around the situation isn't easy. With countless sectors set to be hit by tariffs, it's difficult to know where to begin to comprehend the situation."

As far as the March payrolls figures are concerned, Kathleen Brooks, research director at XTB they seem "very stale and out of date after this week's tariff announcements".

"Friday's payrolls data will not be impacted by Trump's extreme tariffs, we will need to wait for the coming months to see how this could impact the hard US economic data, which has only moderated slightly, compared to a sharp fall in the soft economic data since the start of 2025. Either way, payrolls are always worth watching," she said.

On home shores, a survey showed that the construction sector faltered in March, as higher costs and a drop in new orders prompted companies to cut jobs.

The S&P Global construction purchasing managers' index came in at 46.4 in March, an improvement on February's multi-year low of 44.6 and marginally ahead of consensus for 46.0. But it remains well below the neutral 50.0 benchmark. A reading above 50.0 suggests growth while one below it indicates contraction.

The survey showed a drop in output levels for the third consecutive month, alongside "sharply" rising input costs.

The reduction in employment was the fastest in nearly four-and-a-half years, meanwhile, as companies introduced hiring freezes and did not replace departing staff.

Among individual sectors, civil engineering was the poorest performing, falling to 38.8 from 39.3 a month earlier on the back of a subdued pipeline of major infrastructure work and delayed decision-making on new projects.

Commercial building fell from 49.0 to 47.4, the fastest rate of contraction since January 2021.

Residential construction also remained in contraction, at 44.7, although it was a notable improvement on February's 39.3.

Tim Moore, economics director at S&P Global Market Intelligence, said: "March data highlighted a challenging month for UK construction companies, as sharply reduced order volumes continued to weigh on overall workloads.

"Companies remained cautious about their year ahead growth prospects, as fewer sales conversions and a third successive monthly reduction in total new work hit confidence levels.

"Overall business optimism slipped to its lowest since October 2023."

In equity markets, it was a similar story to Thursday in terms of which sectors were winning and which were losing, with cyclicals such as banks under the cosh but defensive utilities the best performers.

Barclays, NatWest, HSBC, Lloyds and Standard Chartered tumbled, while SSE, National Grid, United Utilities and Severn Trent gained.

BP slumped after the oil giant said that its chair was stepping down amid calls by investor groups for a shake-up of the board. Helge Lund, who has held the role since January 2019, will leave "in due course", BP said, most likely in 2026 once his successor has been appointed.

The announcement comes less than a month after activist investor Follow This said it would call for a vote against Lund's reappointment at April's shareholder meeting.

Market Movers

FTSE 100 (UKX) 8,180.98 -3.47%

FTSE 250 (MCX) 18,583.52 -3.26%

techMARK (TASX) 4,433.69 -3.04%

FTSE 100 - Risers

SSE (SSE) 1,696.00p 2.60%

National Grid (NG.) 1,076.00p 2.18%

United Utilities Group (UU.) 1,088.50p 1.63%

Marks & Spencer Group (MKS) 374.60p 0.97%

Associated British Foods (ABF) 1,996.50p 0.68%

Severn Trent (SVT) 2,710.00p 0.63%

Tesco (TSCO) 347.60p 0.58%

Unilever (ULVR) 4,809.00p 0.52%

British American Tobacco (BATS) 3,198.00p 0.50%

Imperial Brands (IMB) 2,912.00p 0.41%

FTSE 100 - Fallers

Barclays (BARC) 244.60p -9.71%

Glencore (GLEN) 235.75p -9.61%

NATWEST GROUP (NWG) 410.70p -9.24%

Antofagasta (ANTO) 1,432.00p -8.32%

HSBC Holdings (HSBA) 741.30p -7.88%

Lloyds Banking Group (LLOY) 64.42p -7.58%

Rolls-Royce Holdings (RR.) 691.00p -7.37%

Melrose Industries (MRO) 418.60p -7.20%

Standard Chartered (STAN) 928.00p -7.11%

Anglo American (AAL) 1,862.80p -7.05%

FTSE 250 - Risers

Hilton Food Group (HFG) 848.00p 1.31%

Pennon Group (PNN) 478.00p 1.01%

Primary Health Properties (PHP) 97.75p 0.67%

B&M European Value Retail S.A. (DI) (BME) 285.00p 0.42%

Bakkavor Group (BAKK) 189.60p 0.21%

Foresight Solar Fund Limited (FSFL) 79.00p 0.13%

Greencoat UK Wind (UKW) 106.40p 0.09%

Derwent London (DLN) 1,880.00p 0.05%

Bluefield Solar Income Fund Limited (BSIF) 88.60p 0.00%

Tami Senior Securitisation 2 Ltd Cls A-2 Mb Fxd Rte Nts 31/12/23 (Reg S) (BP00) 0.00p 0.00%

FTSE 250 - Fallers

TBC Bank Group (TBCG) 3,690.00p -8.55%

RHI Magnesita N.V. (DI) (RHIM) 2,625.00p -8.38%

Just Group (JUST) 128.20p -8.03%

Paragon Banking Group (PAG) 682.50p -7.77%

Carnival (CCL) 1,121.50p -7.54%

Lion Finance Group (BGEO) 4,892.00p -7.52%

OSB Group (OSB) 392.20p -7.24%

SSP Group (SSPG) 142.80p -7.09%

Hochschild Mining (HOC) 254.60p -7.08%

Vesuvius (VSVS) 340.40p -7.05%