Trump's tariffs pull FTSE 100 off record high

Tue, 04th Mar 2025 17:06

March 4 (Reuters) - Britain's FTSE 100 fell from all-time highs on Tuesday, while the midcap index posted its worst day of 2025 as growing trade tensions between the United States and its main trading partners hammered global sentiment.

The blue-chip FTSE 100 fell 1.3%, slipping off the previous session's record close. The midcap FTSE 250 lost 2.1%, posting its biggest percentage drop since August.

U.S. President Donald Trump's new 25% tariffs on imports from Mexico and Canada took effect on Tuesday, while duties on Chinese goods were doubled to 20%, sparking trade wars that could slam economic growth and lift prices for Americans still smarting from years of high inflation.

The move sent global equities lower, while safe-haven assets such as government bonds gained in price.

The UK's economically sensitive sectors such as travel & leisure, automobiles & parts and energy fell more than 4% each.

Defence stocks slipped 0.6%, breaking a six-session winning streak.

British finance minister Rachel Reeves said she wants to speed up the procurement of defence equipment, while the European Commission proposed a new joint borrowing plan as part of an 800-billion-euro effort to lift defence spending.

Other defensive sectors rose, with the pharmaceutical and biotechnology index and personal care, drug and grocery stores up 1.4% each.

Among individual stocks, equipment rental company Ashtead fell 8.2% to the bottom of the FTSE 100 after missing profit and revenue estimates.

Shares of baker Greggs slumped 8.6% after sales growth slowed at the start of the year, and the company warned of a difficult year ahead.

Abrdn, however, leapt 7.7% after unveiling a new strategy, including a change of name to 'aberdeen,' while Intertek climbed 4.5% after raising margin expectations. (Reporting by Lisa Mattackal and Sruthi Shankar in Bengaluru; Editing by Shreya Biswas, Alexandra Hudson)