FTSE 100 slips, unsettled by Trump’s latest tough talk on trade
U.K. stocks fell on Friday, as investors grew wary after President Donald Trump fired off another salvo in the tit-for-tat trade spat with China.
The pullback, which comes on the heels of the best day for London stocks since the Brexit vote, follows a White House announcement that the U.S. is considering another $100 billion in tariffs on Chinese imports.
Despite the decline, British blue-chip stocks are still holding around their best level in a month.
How markets are moving
The FTSE 100 index UKX, -0.23% slipped 0.2% to 7,181.42, but is hovering around its highest level since March 12.
On Thursday, the London benchmark surged 2.4% and marked its best daily point and percentage advance since June 29, 2016, when stocks rallied after the Brexit vote.
With Friday’s session still to go, the FTSE 100 is looking at a 1.8% weekly gain, to follow last week’s rise of nearly 2%.
On Wall Street, losses for U.S. stocks at the open look to be far sharper than in the U.K. Dow Jones Industrial Average futures YMM8, -0.98% were pointing to a fall of more than 200 points on the heightened trade tensions.
The pound GBPUSD, +0.0857% traded at $1.4011, compared with $1.4004 late Thursday in New York.
What’s driving markets
U.K. stocks are putting up some resistance to the latest in trade hostilities between the U.S. and China, which appears to be pulling U.S. stocks sharply lower as investors shrink from risk.
In a statement released by the White House on Thursday, Trump said he has instructed the U.S. Trade representative to look at the possibility of imposing tariffs on another $100 billion of Chinese goods.
The move escalates a tense situation in which the U.S. and China have each proposed levies on $50 billion in imports from the other.
Stock markets, including in London, have been volatile as investors swing from optimism to pessimism and back again over the prospect of a full-blown trade war.
Also in focus for investors are the U.S. monthly jobs data, a reflection of the health of the world’s biggest economy. Many London-listed companies count the U.S. as a key market.
Two major retailers are among the biggest decliners, after they were reportedly downgraded by Citigroup. Marks & Spencer Group PLC MKS, -2.41% shares lost 3.5%, while Next PLC NXT, -1.33% shares were down 3%.
Mining stocks reversed some of Thursday’s big gains, as China is a big buyer of industrial and precious metals. Copper for May delivery HGK8, -1.32% fell 4 cents, or 1.2%, to $3.038 a pound.
Among big commodity names, Glencore PLC GLEN, -2.09% shed 1.8%, Rio Tinto PLCRIO, -1.75% RIO, -1.89% BLT, -1.67% slipped 1.6%, and BHP Billiton PLC BHP, +0.27%BLT, -1.67% dropped 1.3%.
Shares of banking major HSBC PLC HSBA, -1.23% HSBC, -0.92% dropped 1.1%.
Adding support to the index, Shire Pharmaceuticals PLC SHP, +1.50% SHPG, +1.09% shares rose 1.3% on a report that Takeda Pharmaceutical Co. 4502, -5.03% is considering taking full control of its Irish rival.
The U.S. nonfarm payrolls data for March is due for release at 8:30 a.m. Eastern Time, or 1:30 p.m. London time. Economists polled by MarketWatch are forecasting an increase of 170,000, far below February’s 313,000 gain.
After the market closes, a speech by U.S. Federal Reserve Chairman Jerome Powell could draw attention for clues to the path of U.S. interest rates. Powell is expected to speak in Chicago at 1:30 p.m. Eastern Time, or 6:30 p.m. London time.