FTSE 100 and global markets slump and gold surges amid tariff panic
The FTSE 100 dipped 0.7 per cent as markets opened on Monday, with the FTSE 250 down a further 1.28 per cent.
The moves followed a sharp drop in Asian markets overnight.
The Nikkei 225 plummeted more than four per cent overnight, amid a global market panic as investor and consumer confidence drops ahead of the next stage of Trump tariffs.
The Japanese index fell 4.1 per cent to 35,615.15.
Meanwhile, Hong Kong’s Hang Seng dipped 1 per cent to 23,200.65, while South Korea’s Kospi sank 2.6 per cent to 2,492.49.
The Australian ASX 200 declined 1.6 per cent to 7,856.80.
Elsewhere, Thailand’s SET index dropped 0.9 per cent following the powerful earthquake in Myanmar.
Gold prices surged past $3,100 to another record high, as nervous investors seek safe bets away from febrile stock markets.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “The last day of March is spring-loaded with uncertainty on financial markets.
“Unease about the effect of Trump’s tariffs has been amplified, causing sharp moves at the start of the week.
“London-listed stocks will not be immune to the tariff fall out, with the FTSE 100 set for a difficult start to the week as investors brace for the debilitating effect of widespread tariffs.”
Streeter said the “stampede into safe havens” such as gold came as investors looked for ways to “shelter their money, amid a high stakes trade game.”
Tariff concerns hit markets
This fresh bout of market wobbles comes ahead of Trump’s so-called ‘Liberation Day’ on 2 April.
From Wednesday, new 25 per cent tariffs on all automotive imports into the US will kick in. Top Japanese carmakers Toyota, Honda and Nissan all saw their shares dip after Trump announced the levies last week.
Trump’s latest trade taxes have sparked fears of stagflation – with the US economy braced for stagnant growth and higher inflation.
The US president told NBC News on Sunday that he “couldn’t care less” if car prices rise as a result of his tariffs.
“People are going to start buying American-made cars,” he added.
Analysts warn that the risk of a US recession is significantly elevated as a result of the trade war.
Goldman Sachs has predicted that aggressive levies will bring US economic growth essentially to a halt, expecting inflation to hit 3.5 per cent – significantly higher than the Fed’s 2 per cent target.
The investment bank is projecting a 35 per cent chance of inflation within the next year.
Meanwhile, figures from last week showed that even ahead of the tariffs, the UK automotive industry has been struggling – with production of cars and commercial vehicles seeing an 11.6 per cent drop.