Following heavy falls in Asia, London’s blue chip share index fell after the US President’s tariffs announcement.
The FTSE 100 Index sharply fell on Thursday morning as it dropped 122.4 points or 1.4% just after trading started.
Germany’s Dax and the French Cac 40 is down by over 2% following Donald Trump imposing 10% tariffs on British goods being imported into the US.
China’s Hang Seng is 1.5% lower and Japan’s Nikkei is down by almost 3% after President Trump announced hefty tariffs globally.
The S&P 500, Dow Jones and the Nasdaq screens are expected to open far lower with sharp declines.
Investors have flocked to the safe haven of gold which has hit new highs, the pound moved up against the US dollar.
Linh Tran, market analyst at XS.com, said: “Unlike previous trade tensions that mainly centred on US–China disputes, this round of tariffs is broader in scope, targeting multiple strategic industries such as electric vehicles, semiconductors, steel, and renewable energy.
“This has raised concerns not only about potential retaliatory measures from affected countries but also about the possibility of a deeper fragmentation of global supply chains in the years ahead.
“The market’s immediate reaction was a widespread shift into defensive mode, with capital flowing out of equities and risk assets and into gold — the traditional safe-haven asset.”
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: “Trump’s bold attempt to reshape international trade has sent shockwaves through global markets.
“The effects of ‘Liberation Day’ are being felt far and wide, with Asian markets down overnight, European stocks under pressure in early trading, and US futures pointing to a big drop later today.
“With tariffs reaching levels unseen in over a century, the US is poised to rake in an additional 600 billion US dollars in tariff revenue in an optimistic scenario, or put that another way, that’d be a 600 billion dollar added cost for businesses or consumers to stomach.”