FTSE 100 jumps 1.2% at start of trading as Europe rebounds
Newsflash: Europen stock markets are rising at the start of trading, despite fears that the trade war between the US and China is intensifying.
Following three days of turmoil, the UK’s London stock exchange is regaining some ground. The FTSE 100 share index is 95 points higher in early trading, up 1.2%, at 7799 points.
Airline operator IAG are the top rise, up 4.9%, followed by technology investor Scottish Mortgage Investment Trust (+4%), miners, oil companies and banks.
Markets are higher across Europe too; France’s CAC index jumped by 1.8%, and Germany’s DAX is 1.3% higher.
This follows gains in some Asia-Pacific markets today, with Japan’s Nikkei jumping by 6%.
The rally comes despite China’s commerce ministry vowing to fight US tariffs “to the end”, after Donald Trump threatened to impose additional levies of 50% unless Beijing dropped its retaliatory tariffs.
Treasury Secretary Scott Bessent said last night that he hoped tariff rates will come down as negotiations get going with US trading partners.
Jim Reid, market strategist at Deutsche Bank, says that optimism over a US-Japan tariff deal is lifting markets:
He told clients:
The market selloff has shown some initial signs of stabilising after the incredible rout over recent days. For instance, the S&P 500 was “only” down -0.23% yesterday, and futures this morning are up +1.32%, which would be the first positive day since the reciprocal tariffs were announced.
That pattern has been evident globally, and in Asia this morning, the Nikkei (+4.99%) is on course for its best day since the summer turmoil, surging back after Treasury Secretary Bessent said that “I would expect that Japan is going to get priority”.
Key events
EU urges China to help resolve tariff crisis
The head of the European Commission has called on China to help negotiate a solution to the trade war gripping the global economy.
Ursula von der Leyen spoke to China’s premier Li Qiang by phone, to discuss the state of EU-China relations.
According to the EC, von der Leyen underscored the vital importance of stability and predictability for the global economy (something the recent market crash has also highlighted).
And she said Europe and China both have a responsibility to support a strong reformed trading system, that is “free, fair and founded on a level playing field”.
A readout of the call says:
The President called for a negotiated resolution to the current situation, emphasising the need to avoid further escalation.
Von der Leyen also emphasised “China’s critical role in addressing possible trade diversion caused by tariffs”, a nod to concerns that good initially meant for the US market could be sold in Europe instead, to avoid Trump’s tariffs.
Fall in oil prices poses risk to Russian economy: central bank chief
Oil has fallen by 14% over the last week, as Donald Trump’s trade war has spooked the energy markets.
And this is causing anxiety in Moscow.
Reuters reports:
A sharp drop in global oil prices triggered by U.S. President Donald Trump’s tariffs poses a risk to the Russian economy, the state TASS news agency cited Elvira Nabiullina, the governor of Russia’s central bank, as saying on Tuesday.
She was quoted as saying that the central bank was analysing the fallout, but as saying that a technical budget rule would smooth out the consequences for the budget.
Goldman says global slowdown could drive oil below $40 per barrel
Goldman Sachs has predicted that oil prices could fall below $40 per barrel by the end of next year, if Donald Trump’s trade war hammers the global economy and suppliers keep increasing production.
In a new research note, Goldman estimate that Brent would fall just under $40 per barrel in late 2026, if there is a US recession leading to a global GDP slowdown, and if the OPEC+ group unwind all their existing production cuts regardless.
That would be the lowest price for oil since November 2020, (just before the first analysis showing the Covid-19 vaccines were effective triggered a market rally).
Goldman says:
Oil prices are unlikely to fall well below $40/bbl on a sustained basis for two reasons.
First, US shale offers an increasingly firmer floor at lower prices.
Second, a potential 2025 US recession is unlikely to be very deep, in part given a lack of major financial imbalances in the private sector.
Brent crude is trading around $64 per barrel today..
Goldman’s baseline forecast is that oil will dip to $62/barrel by December, and to $55/barrel by the end of 2026. That is based on there being a “large reduction in tariffs”, allowing the US economy avoiding a recession, and only moderate supply increases from OPEC+.
This is seen as more likely than the “more extreme and less likely scenario” of a global slowdown and a full unwind of OPEC+ cuts that would send oil below $40.
Ford: Customer confidence is a challenge in trade war
The chair of Ford UK has flagged the risks that Donald Trump’s trade war hurts consumer confidence, denting demand for new cars.
Speaking to Radio 4’s Today Programme, Lisa Brankin said that “everyone in business” is concerned by the impact of new US tariffs.
Brankin says most of what Ford sells in Europe is made in the region, so there is very little exposure to tariffs.
But “one of the challenges ahead is customer confidence”, Brankin says, adding:
What we really want to make sure is that customer demand remains strong.
“After multiple punishing sessions, stock markets appear to have started their road to recovery,” says Russ Mould, investment director at brokerage AJ Bell.
Mould explains:
“Asia led the way, including a 6% advance from the Nikkei after Japan effectively jumped to the front of the queue for tariff negotiations with Donald Trump. Reports that Japan would get priority status for talks fired up markets in hope of a resolution.
“Trump has the same end-goal for the countries on which he has imposed new tariffs. He wants to make it easier for US companies to do business overseas, for the partnering countries to buy more US goods, and for the US to get its hands on strategically important assets such as natural resources.
Investors will be pondering whether a breakthrough in tariffs could unleash “the mother of all rebound rallies”, Mould reports, before cautioning:
“Markets could stay fragile for days and weeks to come. It would only take a new sign of aggression from Trump or a trading partner fighting back hard to cause upset again. Market recoveries can quickly lose momentum if investors lose faith in a remedy to the situation that caused the original sell-off.”
The stock market rally appears to be holding firm in London.
The FTSE 100 share index is now up 103 points, or +1.35%, at 7805 points, after 30 minutes trading.
Rolls-Royce, the engineering firm that makes and services jet engines, is now the top riser in London, up 4.7%, followed by British Airways parent company, IAG.
Richard Hunter, head of markets at interactive investor, says it isn’t clear, yet, whether this is a significant “inflection point” or merely a “dead cat bounce”.
It is far too early to say whether the reduced market falls represent an inflection point, or whether they are simply a classic “dead cat bounce”.
The volatility within the US trading session in particular suggest that either is possible, especially since further tariff announcements will follow which could move sentiment in either direction.
Indeed, many investors have noted – with some exasperation – that unlike previous crises where a confluence of factors came together to cause extreme market weakness, this set of events is largely due to the actions of just one person. To some extent, global indices are at the mercy of the President, and the growing backlash which the US is beginning to experience in terms of retaliatory tariffs and increasingly aggressive rhetoric are not even near the end of the beginning.
UK medical device maker and investment firm warn of tariff impact
Worryingly, some UK companies are reporting that the new US tariffs could hurt their businesses.
Belluscura, a UK medical device company which develops oxygen enrichment technology, has this morning withdrawn its financial guidance for this year.
Belluscura, which is listed on the AIM stock market, told shareholders:
The Company is currently assessing the potential financial implications, risks and opportunities of the imposition of tariffs, in particular the 54% tariff (previously 20%) for goods imported from China, in which a significant proportion of the Company’s Portable Oxygen Concentrators, raw materials and component parts are currently manufactured.
AIM-listed specialist investor Impax has also flagged the threat of tariffs this morning, as it warned the City it expects its full year profits will be below market expectations.
Citing “the impact on global markets of an escalating trade war”, Impax told investors:
“Market conditions in the second half of FY25 remain highly uncertain.
The pan-European Stoxx 600 index has jumped by 1.4% in early trading.
Investors are waking up to a positive sight for once, says Matt Britzman, senior equity analyst at Hargreaves Lansdown, with stock indices higher across Europe.
But, he cautions:
However, this should hardly be seen as the end of the trouble, especially with President Trump showing no signs of easing his stance on perceived trade imbalances, having doubled down on China. Still, there is a glimmer of hope, as Japanese markets are up nearly 6% following news that trade talks will begin in a few days.
The sooner deals are reached, the quicker companies and investors can gain some clarity on the lay of the land.
Streeting: tariffs add to medicine supply challenges
The UK’s health secretary has warned that US tariffs provide “another layer of challenge” for ensuring the supply of medicines.
Wes Streeting told Sky News:
“Until this trade war erupted, we’d already had issues with medicines production and supply internationally.
We are constantly watching and acting on this situation to try and get medicines into the country, to make sure we’ve got availability, to show some flexibility in terms of how medicines are dispensed, to deal with shortages.
But whether it’s medicines, whether it’s parts for manufacturing, whether it’s … the ability of businesses in this country to turn a profit, this is an extremely turbulent situation.”
FTSE 100 jumps 1.2% at start of trading as Europe rebounds
Newsflash: Europen stock markets are rising at the start of trading, despite fears that the trade war between the US and China is intensifying.
Following three days of turmoil, the UK’s London stock exchange is regaining some ground. The FTSE 100 share index is 95 points higher in early trading, up 1.2%, at 7799 points.
Airline operator IAG are the top rise, up 4.9%, followed by technology investor Scottish Mortgage Investment Trust (+4%), miners, oil companies and banks.
Markets are higher across Europe too; France’s CAC index jumped by 1.8%, and Germany’s DAX is 1.3% higher.
This follows gains in some Asia-Pacific markets today, with Japan’s Nikkei jumping by 6%.
The rally comes despite China’s commerce ministry vowing to fight US tariffs “to the end”, after Donald Trump threatened to impose additional levies of 50% unless Beijing dropped its retaliatory tariffs.
Treasury Secretary Scott Bessent said last night that he hoped tariff rates will come down as negotiations get going with US trading partners.
Jim Reid, market strategist at Deutsche Bank, says that optimism over a US-Japan tariff deal is lifting markets:
He told clients:
The market selloff has shown some initial signs of stabilising after the incredible rout over recent days. For instance, the S&P 500 was “only” down -0.23% yesterday, and futures this morning are up +1.32%, which would be the first positive day since the reciprocal tariffs were announced.
That pattern has been evident globally, and in Asia this morning, the Nikkei (+4.99%) is on course for its best day since the summer turmoil, surging back after Treasury Secretary Bessent said that “I would expect that Japan is going to get priority”.
China’s yuan hits 19-month low after central bank guides currency weaker
China’s currency has weakened to its lowest level in 19 months today.
The yuan, which is tightly controlled by the People’s Bank of China, dropped to 7.3363 to the dollar, the weakest level since September 2023.
The yuan slipped after the PBOC lowered its target rate for the yuan to 7.2038/dollar (it can then move up or down by 2%).
China’s yuan has fallen to its lowest level against the U.S. dollar since 2023, amid escalating trade tensions and economic uncertainty. pic.twitter.com/O4t3vvq3DF
— Abir (@I_amAbir) April 8, 2025
A weaker yuan could help China’s exports more competitive overseas, which could be valuable in a global trade war and could cushion higher tariffs at the US border.
Stephen Innes, managing partner at SPI Asset Management, says the yuan has slipped past the ‘line in the sand’:
The PBOC just crossed the line in the sand — today’s fix dropped on the wrong side of 7.20 for the first time since 2023. That level wasn’t just psychological — it was the unofficial devaluation threshold. Translation: this isn’t a warning shot, it’s Beijing quietly signaling that something much bigger could be coming.
We flagged this yesterday, even as certain anti-Trump media corners tried to spin a weaker yuan as some kind of export booster. Let’s be honest: devaluation isn’t stimulus — it’s desperation. And it comes with serious tail risk.
Berenberg: UK is well placed to weather the tariff shock
The UK is “well placed to weather the tariff shock” rippling out from the US, argues Berenberg bank in a research note this morning.
Berenberg say they expect many of Donald Trump’s new tariffs to be negotiated away in the next three months, containing the global damage. However, the worst-case scenario of a global recession cannot be ruled out, they say.
In that situation, though, the UK – “No longer the leader in economic self-harm”, they say – could do quite well.
They argue:
The UK has not been short of policies that damage the economy over the past decade. But the US administration’s assault on foreign trade will overshadow the UK’s missteps.
If Donald Trump’s trade war and the equity market sell-off trigger a global recession, the UK would of course struggle. However, the UK is relatively well placed to weather the tariff shock. The additional 10% rate it faces is at the bottom end of the range imposed by the US. Healthy consumer finances, lower energy prices and a fall in interest-rate expectations will also help.
Despite this, UK equity prices have fallen by as much as their European counterparts in the year to date.
The UK’s weakness as an exporter could even turn into a strength in the current environment, Berenberg add:
UK goods exports to the US account for less than 2% of GDP (most of which are re-exports), compared to 3.2% for the Eurozone. The share of UK value added embodied in US demand is well below 1% of GDP. UK government calculations imply that the 10% tariff will directly reduce GDP by less than 0.1%.
In our view, the UK could even stand to make a gain. Some UK producers may gain US market share from worse-hit competitors, and international companies could relocate operations to the UK to avoid higher charges. Admittedly, the spillover from slower growth in economies worse affected by US tariffs will ensure that, in absolute terms, UK growth is weaker than it otherwise would have been.
Wall Street is set to open higher too, despite the latest threats being exchanged between Beijing and Washington DC.
After several days of heavy selling, European stock markets are on track to open higher in an hour’s time.
The futures market is indicating that stocks will rally today in London, with the FTSE 100 share index being called up 167 points, or 2.2%. That would recover about half of yesterday’s losses, and lift the ‘Footsie’ back up from Monday’s one-year low.
Germany’s DAX is also set for a rally – it’s up 2% in pre-market trading.
Summary
If you’re just catching up with today’s continued market ructions over Donald Trump’s sweeping tariffs, here’s a recap of where we stand.
-
China’s government says it will “fight to the end” if the US continues to escalate the trade war, after the US president threatened 50% additional tariffs in response to Beijing’s retaliatory measures, ramping up the chances of a disastrous stand-off between the two economic superpowers. China’s commerce ministry accused Washington of “blackmail” and said Trump’s threats of steeper tariffs if Beijing did not reverse its own 34% reciprocal tariff were a “mistake on top of a mistake” and that China would “resolutely take countermeasures”.
-
Asian markets appeared to improve slightly in early trading on Tuesday, a day after a torrid Monday on global markets that prompted the billionaire investor Bill Ackman, one of the US president’s backers in the 2024 race for the White House, to call for a moratorium.
-
Tokyo traded up more than 6%, recovering much of Monday’s drop, after Japanese prime minister Shigeru Ishiba held talks with Trump. Nippon Steel added about 11% after Trump launched a review of its proposed takeover of US Steel that was blocked by Joe Biden, his predecessor.
-
Hong Kong gained more than 2% but was well off recouping Monday’s loss of more than 13% that was the biggest one-day retreat since 1997.
-
Shanghai was also up on Tuesday after China’s central bank promised to back major state-backed fund Central Huijin Investment in a bid to maintain “the smooth operation of the capital market”. Sydney, Seoul, Wellington and Manila also rose.
-
The advance followed a less painful day on Wall Street, where the S&P and Dow fell but pared earlier losses, while the Nasdaq edged up. Oil prices also enjoyed some respite, gaining more than 1%.
-
Others did not fare as well, amid analyst warnings that things could get worse. Taipei shed more than 4% to extend the previous day’s record loss of 9.7%, while Singapore also suffered further selling. Trading in Jakarta was suspended soon after the open as it plunged more than 9% as investors returned from an extended holiday, while the bourse in Vietnam – which has been hit with 46% tariffs – shed 5%.
-
The European Commission has proposed counter-tariffs of 25% on a range of US goods, while saying it stands ready to negotiate a “zero for zero” deal with Trump. The 27-member EU – already hit with tariffs on vehicles and metals – faces another 20% on other items from Wednesday. EU trade commissioner Maros Sefcovic told a news conference: “Sooner or later, we will sit at the negotiation table with the US and find a mutually acceptable compromise.”
– With Helen Davidson and agencies
Taiwan’s foreign minister, Lin Chia-lung, has said it can have negotiations with the US at any time over tariffs, as the island’s stock market steadied after plunging on Monday.
Taiwan – a major semiconductor producer – was singled out by Donald Trump as among the US trading partners with one of the highest trade surpluses with the country and was hit with a 32% duty.
Taiwan’s president, Lai Ching-te, on Sunday proposed a zero-tariffs regime with the US, and to invest more in the country and remove trade barriers.
Speaking to reporters on the sidelines of parliament on Tuesday, Lin said Taiwan was ready to talk about a variety of issues with the US, including investment in and purchases from the country and non-tariff barriers, Reuters reports. He said:
As long as there is a confirmed time and method for negotiations, they can be discussed at any time with the United States.
The premier, Cho Jung-tai, also speaking at parliament, confirmed Taiwan was among the US trading partners seeking talks and said the government would choose an appropriate time to present Lai’s plans to the US.
Taiwan’s benchmark stock index, which logged its worst fall ever on Monday, down almost 10%, fell another 4% on Tuesday morning to its lowest level in 14 months. Shares in TSMC , the world’s largest contract chipmaker, dropped around 4%.
Shares in Foxconn, Apple’s biggest iPhone maker, dropped almost 10%, their daily down limit, extending their previous day’s fall.
Recapping Asian market movements so far today, stocks appeared to find a firmer footing after the gut-wrenching few days for investors that prompted some business leaders – including those close to Donald Trump – to urge the US president to reverse course.
Agence France-Presse reports that Japan’s Nikkei index rose 6% on Tuesday, rebounding from a one-and-a-half-year low hit in the previous session, after Trump and Japanese prime minister Shigeru Ishiba agreed to open trade talks in a phone call late Monday.
Chinese blue-chips climbed 0.7%, recouping a fraction of the more than 7% slide on Monday. Hong Kong’s Hang Seng index jumped 2% after suffering the worst day since 1997 as a result of what the trading hub’s leader called “ruthless” tariffs.
US stock futures also pointed higher after slumping to the lowest level in more than a year.
Indonesian markets were slammed, however, with stocks shedding 9% and the rupiah currency ploughing a record low as trading resumed on Tuesday after an extended holiday.
Trump said the tariffs would help the US recapture an industrial base he says has withered over decades of trade liberalisation, telling reporters at the White House:
It’s the only chance our country will have to reset the table. Because no other president would be willing to do what I’m doing, or to even go through it.
In New Zealand, Christian Hawkesby has been appointed as governor of its central bank for a six-month period, finance minister Nicola Willis said on Tuesday.
Hawkesby had been serving as its acting governor since the surprise resignation of Adrian Orr last month.
Willis said Hawkesby was an experienced central banker who had held a number of senior positions at the Reserve Bank of New Zealand and would help ensure its “continued integrity and operations” while a search for a permanent governor was under way, Reuters reports.
During his term, the board would support Hawkesby to implement the bank’s new five-year funding agreement applying from 1 July, Willis said.
