A global sell-off has swept across the financial markets after Donald Trump’s tariff announcement, with the US’s top index plunging to a seven-month low and European stocks facing a bruising session.
Mr Trump’s plans to impose sweeping tariffs has stoked fears over the outlook for global economic growth and a possible recession in the United States.
This led stock markets all round the world to suffer steep losses on Thursday.
In the UK, the FTSE 100 dropped 133.74 points, or 1.55%, to close at 8,474.74 – the lowest level since mid-January.
The UK is being hit with a 10% tariff on all exports – compared with a 20% rate facing the European Union, and significantly higher levies for countries such as China and Indonesia.
European indices suffered steeper falls as a result, with the Dax in Germany plunging 3.08% and the Cac 40 in France closing 3.31% lower on Thursday.
Markets across US were facing a battering in early trading over on Wall Street.
The country’s top index, the S&P 500, was tanking by about 4% when European markets closed – hitting the lowest level since September.
The Dow Jones tumbled around 3.3%, while the technology-focused Nasdaq index plunged about 5.2%.
Jochen Stanzl, chief market analyst at CMC Markets, said: “The stock markets have ultimately become pawns of politics.
“The reaction of stock indices around the globe speaks volumes. The damage is widespread, with no exceptions; everything is being thrown into turmoil.
“Even US stocks, such as those of automakers in Michigan and Chicago that were ostensibly meant to be protected by Trump’s tariffs, are suffering today.”
The US dollar was also dropping sharply against key currencies as trader reacted to developments from the US amid uncertainty over how global trade will be impacted by new tariffs, and how far affected countries will respond with retaliatory action.
By the time European markets closed, the pound was up 0.8% against the US dollar, at 1.311.
Sterling was down 1% against the euro, at 1.186.
The price of Brent crude oil also plummeted on Thursday, amid worries about how global trade will be affected. The commodity was down about 6.8%, to 70 US dollars per barrel.
In company news, Currys raised its profit targets for the second time this year after sales grew further in recent months.
Shares in the electricals retailer shot higher after upgrading its adjusted pre-tax profit outlook to around £160 million for the current financial year.
It previously said it was on track for a profit of between £145 million and £155 million. Shares in Currys climbed 14.9%.
Elsewhere, shares in Watches of Switzerland tumbled as the retailer was caught up in the fallout of tariff announcements.
The luxury watch seller makes about half its sales in the US, and most watches it sells are Swiss-made. Switzerland has been hit with a reciprocal tariff of 31%.
Watches of Switzerland shares closed 13.5% lower.
The biggest risers on the FTSE 100 were Severn Trent, up 148p to 2,693p, SSE, up 79p to 1,653p, United Utilities, up 47p to 1,071p, National Grid, up 45p to 1,053p, and Tesco, up 14.5p to 345.6p.
The biggest fallers on the FTSE 100 were Standard Chartered, down 153.5p to 999p, HSBC, down 78.3p to 804.7p, Barclays, down 25.85p to 270.9p, Intermediate Capital, down 162p to 1,823p, and Mondi, down 92.5p to 1,071p.
