A sell-off across US markets has continued as investor sentiment soured amid growing fears that the world’s largest economy is facing a recession.
The mood spilled over into London’s FTSE 100 on Monday which dropped 79.66 points, or 0.92%, to close at 8,600.22.
It follows a week of turbulence for global stock markets, in which investors have tried to digest the impact of US tariffs on Canada, Mexico and China.
Over the week, American President Donald Trump made policy, then reversed it, including temporarily halting tariffs on Canada and Mexico on Thursday.
On Wall Street, the S&P 500 had plunged 2.3% by the time European markets closed, and Dow Jones was down 1.2%.
Experts said there could be a number of reasons for the sell-off.
David Morrison, a senior market analyst for Trade Nation, said there was uncertainty surrounding tariffs, adding: “The president appears to be taking a scatter-gun approach in terms of targets, while teasing the markets with last-minute reprieves, delays or softening in scope.
“All-in-all, it’s proving difficult to price all this in.”
He also said there are “some concerns over the US economy”, with Mr Trump ducking questions about whether the country was facing a recession during an interview aired on Sunday, and instead saying it was a time of “transition”.
Dan Coatsworth, investment analyst at AJ Bell, said: “The US market sell-off is starting to look ugly.
“Many people have been worried about elevated valuations among US equities for some time and looking for the catalyst for a market correction.
“A combination of concerns about a trade war, geopolitical tensions and an uncertain economic outlook could be that catalyst.”
In Frankfurt, Germany’s Dax index suffered another sharp decline on Monday, closing 1.69% lower. In Paris, the Cac 40 fell 0.9%.
The pound was weakening against key currencies, falling about 0.3% against the US dollar, at 1.289, and down about 0.2% against the euro, at 1.19.
The price of Brent crude oil was down around 1.2% to 69.60 US dollars per barrel.
In company news, shares in shipping broker Clarksons dived by a fifth after the company warned over the impact of geopolitical uncertainties, including trade tensions, tariffs, and ongoing global conflict.
Clarksons said this was causing rates charged by shipping companies to fall over the start of the year, which has brought down the value of deals. Its shares closed 21.7% lower.
Building materials firm Travis Perkins said it has kick-started the search for a new chief executive as it announced Pete Redfern was leaving due to ill health, six months into the role.
Mr Redfern was leaving immediately to prioritise his health, ending a “brief but promising tenure” as CEO, the company said.
Travis said it would immediately begin a search for a successor. Shares in the firm dropped 8.4% on Monday following the announcement.
The biggest risers on the FTSE 100 were Kingfisher, up 9.5p to 268.6p, Whitbread, up 84p to 2,598p, Severn Trent, up 68p to 2,461p, National Grid, up 25.8p to 955.6p, and Land Securities, up 15p to 564p.
The biggest fallers on the FTSE 100 were Entain, down 62.4p to 661.2p, Rolls-Royce, down 68.6p to 732.8p, Intermediate Capital, down 124p to 2,004p, Anglo American, down 124p to 2,257.5p, and Barclays, down 14.2p to 284.55p.
