UK stocks experienced a decline on Monday morning, aligning with broader European market trends due to concerns over the impact of punitive tariffs imposed by the Trump Administration on Mexico, Canada, and China. President Trump has also indicated potential tariff targets could include the European Union and the UK.
Despite this, the decline in the UK market was somewhat mitigated compared to that seen in Germany and France, as Trump suggested that the UK might evade tariffs, even though it was "out of line" concerning trade relations. The US President expressed a positive outlook on resolving the trade imbalance with the UK, stating confidently, "I think that one can be worked out."
The leading FTSE 100 index fell by 112.31 points, or 1.29%, resting at 8,561.65, slightly recovering from a low of 8,546.53.
Notable declines included Scottish Mortgage, which dropped by 4.5%. Other significant decliners, down by up to 4%, included Antofagasta, Croda International, Vistry Group, ICP, Diageo, IMI, and Segro. Additionally, Weir Group Holdings, Glencore, Entain, Ashtead Group, Legal & General, DCC, Spirax-Sarco, Convatec, Associated British Foods, Anglo American Plc, Pershing Square Holdings, JD Sports Fashion, Frasers Group, Barclays, Smiths, Next, and HSBC Holdings witnessed drops between 2% to 3%.
Economically, the S&P Global UK Manufacturing PMI was reported at 48.3 for January 2025, slightly above the preliminary estimate of 48.2, improving from December’s 11-month low of 47.0. However, the index continues to reflect a significant downturn in operating conditions, with manufacturing output contracting for the third consecutive month due to declining new orders, both domestically and internationally.
