LONDON MARKETS: FTSE 100 Heads For 3.7% Weekly Slide As Markets Tumble On Trade-war Fears
23 März 2018 - 10:35AM
Dow Jones News
By Sara Sjolin, MarketWatch
Smiths Group tanks 10% after earnings
U.K. stocks traded firmly lower on Friday, with fears of a
global trade war hurting investor appetite after U.S. President
Donald Trump announced import tariffs on as much as $60 billion of
Chinese products.
Smiths Group topped the list of declines in London after
reporting a fall in profit.
What are markets doing?
The FTSE 100 index lost 0.8% to 6,898.00, setting it on track
for 3.7% weekly decline, the biggest one-week drop since early
February. It the benchmark ends at current levels, it will mark the
lowest close since Dec. 12, 2016, according to FactSet.
The pound rose to $1.4108 from $1.4096 late Thursday in New
York.
What is driving the market?
Trade war fears were back in focus on Friday after tensions
between the U.S. and China escalated. Trump's plans to slap more
tariffs on Chinese products have already triggered retaliatory
actions from the Asian powerhouse
(http://www.marketwatch.com/story/china-plans-3-billion-in-retaliatory-tariffs-against-us-goods-2018-03-22),
which rolled out measures to impose tariffs on up to $3 billion of
U.S imports, such as fruit, pork and recycled aluminum.
China's tariff list didn't include big-ticket U.S. exports such
as soybeans and Boeing airplanes, interpreted as Beijing leaving
room to escalate or negotiate.
Also on Thursday night, Trump formally approved temporary
exclusions
(http://www.marketwatch.com/story/eu-plus-six-other-nations-get-temporary-us-tariff-reprieve-2018-03-23)
from steel and aluminum tariffs until May 1 for Argentina,
Australia, Brazil, Canada, Mexico, European Union nations and South
Korea.
The tariff news sent U.S. stocks tumbling on Friday, feeding
into the Asian session as well, where Japan's Nikkei 225 index
dropped 4.5%.
What are strategists saying?
"Risk appetite has plummeted as fears over protectionism and a
trade war between the world's two largest economies have taken
hold," said Richard Perry, market analyst at Hantec Markets, in a
note.
"China's response was 'China is not afraid of and will not
recoil from a trade war,' according to the China embassy in
Washington. Although China has only announced around $3bn of
tariffs on U.S. goods, so far, these are not the words of a nation
willing to stand aside and let this happen quietly. It may be that
quite how China deals with this situation in the coming days will
determine the market's appetite for risk again," he added.
Which stocks are in focus?
Shares of Smiths Group PLC (SMIN.LN) tumbled 9.6% after the
engineering company' said profit fell in the fiscal first half of
the year
(http://www.marketwatch.com/story/smiths-group-profit-drops-in-first-half-2018-03-23),
hit by higher research costs and lower margin.
(END) Dow Jones Newswires
March 23, 2018 05:20 ET (09:20 GMT)
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