Major European stocks returned to decline on Wednesday after the fresh wave of US tariffs kicked in.
It came after a brief day of respite for financial markets on Tuesday, recouping some of their recent losses over hopes the US could strike some trade deals.
However, London stocks were among those to sink back after trading restarted following the imposition of President Donald Trump’s tariff regime overnight.
Pharmaceutical and mining stocks were particularly weak following the session.
The FTSE 100 finished down by 2.92%, or 231.05 points, to close at 7,679.48 – its lowest since March 2024.
Traders were particularly nervy during the session after the Chinese government raised their tariffs on all US goods to 84% amid the growing trade war between the nations.
The Cac 40 ended 3.34% lower for the day and the Dax index was down 2.96%.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “Wednesday has turned into wipeout for equities as the trade war has taken on another twist of escalation.
“The internationally-focused FTSE 100 has dived deeper into the red, with losses accelerating following the retaliatory action.”
However, the situation was somewhat calmer in the US, where the Dow Jones and S&P opened slightly higher before teetering broadly flat after early trading.
Meanwhile, sterling was slightly lower as long-term UK gilt yields rose to their highest level since 1998.
The pound was down 0.06% at 1.276 US dollars and was down 0.69% at 1.156 euros when London’s markets closed.
In company news, JD Sports shares were firmly higher after the retail group after it held firm on profit guidance, reassuring investors who held concerns over its exposure to the US market.
The London-listed firm, which has hundreds of stores in the US, nevertheless said that trading conditions are set to be “volatile” this year amid uncertainty over the impact of tariffs.
JD Sports shares were up 9.5% at 69.18p at the close.
Assura also made gains on Wednesday after the NHS landlord agreed to be taken over by a US private equity giant in a deal worth £1.61 billion, after becoming the target of a bidding war.
The London-listed company will be bought by Kohlberg Kravis Roberts (KKR) and Stonepeak Partners.
Shares closed 5.1% higher at 47.5p.
Elsewhere, recruiter PageGroup was among the fallers after it reported “challenging trading conditions” and declined to give financial forecasts for the coming months because of uncertainty caused by Mr Trump’s tariffs.
Shares in the firm were 2.4% lower at 250.6p as it said it would target £15 million in annual cost cuts to help support its finances.
The price of oil meanwhile slid to another three-year-low over concerns about the impact of frayed US-China trade relations.
A barrel of Brent crude oil was down by 3.9% to 60.32 dollars (£47.21) as markets were closing in London.
The biggest risers on the FTSE 100 were JD Sports, up 6.02p to 69.18p, Fresnillo, up 21p to 883p, Endeavour Mining, up 40p to 1,778p, 3i Group, up 55p to 3,600p, and Airtel Africa, up 2p to 149.7p.
The biggest fallers on the FTSE 100 were AstraZeneca, down 707p to 9,667p, BP, down 21.3p to 332.95p, GSK, down 76.5p to 1,264p, Smith & Nephew, down 53.8p to 937.8p, and Persimmon, down 61p to 1,084.5p.
