FTSE 100 Edges Lower Amid Renewed Trade Uncertainty
The FTSE 100 closed marginally lower on Monday, as strength in mining stocks was counterbalanced by heightened concerns over US trade policy following President Donald Trump's announcement of a 15% global tariff. The index dipped by just 2.15 points to settle at 10,684.74, while the FTSE 250 experienced a more pronounced decline, falling 204.91 points, or 0.9%, to 23,546.65. In contrast, the AIM All-Share index managed a slight gain, adding 1.15 points, or 0.1%, to close at 816.26.
Mining Sector Outperforms as Precious Metals Rally
Within the FTSE 100, mining companies demonstrated notable resilience. Fresnillo and Endeavour Mining surged by 3.2% and 6.4% respectively, with Antofagasta climbing 2.2% and Glencore advancing 1.2%. This uptick was supported by a rally in precious metals, where gold prices rose to $5,216.70 per ounce from $5,066.90, and silver gained 3.3%. Joshua Mahony, an analyst at Scope Markets, attributed gold's three-week high to geopolitical tensions in Iran and the prevailing uncertainty surrounding global trade policies.
Trump's Tariff Escalation Fuels Market Jitters
The latest trade anxieties emerged after President Trump declared his intention to impose a 15% global tariff, a move that followed a US Supreme Court ruling that struck down many of his sweeping duties from the previous year. In a social media post on Saturday, Trump justified the decision, citing a "thorough, detailed, and complete review" of what he termed a "ridiculous, poorly written, and extraordinarily anti-American" court decision. Initially, after the court limited his emergency powers, Trump signed an executive order to bypass Congress and implement a 10% tax on imports worldwide, later raising it to 15%.
Mahony commented, "This latest shake-up to global trade no doubt provides a fresh degree of uncertainty going forward. No longer does this look like a targeted policy aimed at fixing an unfair system for the US, but instead it is essentially a blanket tax aimed at replicating the income from the old tariffs."
Currency and European Market Movements
In currency markets, the pound strengthened to $1.3505 on Monday afternoon from $1.3492 at Friday's close, while the euro rose to $1.1801 from $1.1780. The dollar weakened against the yen, trading at 154.33 yen compared to 154.95 yen. European equities also faced pressure, with the CAC 40 in Paris closing down 0.2% and the DAX 40 in Frankfurt ending 1.1% lower, despite data showing an unexpected improvement in Germany's business climate for February.
Corporate Highlights and Sector-Specific Trends
On a corporate level, JD Sports Fashion gained 3.4% after announcing a £200 million share buyback plan for the 2027 financial year, starting immediately with an initial £100 million. Conversely, software and data providers struggled amid AI disruption concerns, with Sage Group falling 4.4%, London Stock Exchange dipping 2.5%, and Experian declining 2.6%.
In the FTSE 250, Mony Group advanced 2.8% following the announcement of a £25 million share buyback and improved annual results, despite challenges in the car insurance sector. However, Johnson Matthey plunged 17% after Honeywell International revised the acquisition price for its Catalyst Technologies division downward from £1.80 billion to £1.33 billion, extending the completion deadline to August 2026.
Global Market Overview and Key Declines
US markets mirrored the downward trend, with the Dow Jones Industrial Average down 1.4%, the S&P 500 index 1.0% lower, and the Nasdaq Composite declining 1.1%. Treasury yields eased slightly, with the 10-year yield narrowing to 4.04% from 4.09%. In pharmaceuticals, Novo Nordisk slumped 16% in Copenhagen after its obesity drug candidate failed to meet primary endpoints in a trial, while Eli Lilly rose 4.6% in New York.
Brent crude oil traded higher at $71.96 per barrel from $71.33. The biggest risers on the FTSE 100 included Endeavour Mining, JD Sports Fashion, Fresnillo, Marks & Spencer, and Centrica, while the largest fallers were ICG, Pershing Square Holdings, Sage Group, Mondi, and Whitbread.
Looking Ahead: Economic and Corporate Calendar
Tuesday's global economic calendar features consumer confidence figures, the Richmond Fed manufacturing index, and the S&P/Case-Shiller home price index. Domestically, full-year results are anticipated from specialty chemicals maker Croda, lender Standard Chartered, and student accommodation provider Unite.
