- Prudential and Scottish Mortgage worst hit on China and tech exposure
The FTSE 100 opened sharply lower on Monday morning as the threat of a looming trade war hit stock markets around the world and investors crowded into safe haven assets such as gold.
President Donald Trump is said to be considering following up duties of 25 per cent slapped on Canadian and Mexican goods, and a 10 per cent levy on China, with similar measures on the UK and eurozone.
The governments of China, Mexico and China have all threatened retaliatory measures on the import of US goods or services in response.
The FTSE 100 was down 1.4 per cent by mid-morning, while the FTSE 250 slipped 1.9 per cent, tracking similar sized losses on European and Asian exchanges.
Sterling slumped 0.7 per cent against the dollar to $1.2298, but added 0.6 per cent against the euro.
Richard Hunter, head of markets at Interactive Investor, said the FTSE 100 had so far this year been ‘something of a haven destination given technology volatility elsewhere’.

President Trump’s threat of a looming trade war has led the FTSE 100 to tumble
But the index has now ‘succumbed to the possibility that even its overseas earnings constituents would be caught in the [tariffs] crossfire’, Hunter said.
He added: ‘The almost unanimous markdown of prices [includes] particular weakness for China-exposed stocks such as the miners and Prudential, while Scottish Mortgage [tops] the loser board given its own focus on US tech.’
The UK could still be spared similar sanctions after Trump said overnight that trade issues with the country ‘can be worked out’, suggesting he is more focused on the eurozone.
Britain has a goods and services trade deficit with the US worth $20.8billion annually, according to the most recent figures published by the US government.
By contrast, the US runs a trade deficit with the European Union worth $131.3billion.
Gold prices continued their ascent as investors looked for save havens, inching higher to $2,797 after adding more than 41 per cent over the last 12 months.
While bitcoin has been a key beneficiary of Trump’s election since the end of last year, the price of the world’s biggest cryptocurrency slipped 1.8 per cent having lost more than 9 per cent over the last five days.
Susannah Streeter, head of money and market at Hargreaves Lansdown, said markets are ‘rattled at the prospects of a full-blown trade war breaking out’, with investors ‘buckling up for a rollercoaster ride for the global economy’.
She added: ‘What was considered to be bluff and bluster from Trump has turned into cold hard reality.
‘President Trump is no longer the only one playing hardball. Canada’s outgoing Prime Minister Trudeau immediately imposed tit-for-tat 25 per cent tariffs on $155billion in US imports. Mexico’s President has also ordered retaliatory action.
‘There is a glimmer of hope that a long-running dispute could be averted with a flurry of calls expected between Trump the leaders of Canada and Mexico, with China also counting on talks.
‘But what’s clear is that Trump is way of doing business is to sow seeds of chaos and unpredictability to gain domestic political wins.’
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This article was originally published by a www.dailymail.co.uk . Read the Original article here. .