- FTSE 100 falls 29 points to 8,661
- Next reports first £1bn profit and hikes guidance
- European shares drop after Trump confirmed 25% automobile tariffs
- Aston Martin shares drop 5.6% on the news
4.29pm: Almost all in the red
The FTSE 100 Index trimmed the worst of its losses, ending around 29 points lower, and was among the best performing stock benchmarks in the wake of Donald Trump confirming 25% tariffs on US automobile imports.
London's mid-caps closed down 114 points or 0.6% at 19,925.1.
Most European indices were in the red - Italy's being the exception - and US stocks were also lower.
But falls were not severe, as investors had already factored most of their worries into shares in recent weeks.
Germany's DAX led the falls, down 0.8%.
Market analyst Fawad Razaqzada at City Index says, "concerns were raised about European carmakers and their profitability.
"And although the markets staged a bit of a recovery after the US open today, and the DAX even managed to erase its earlier losses, it remains to be seen whether markets will stage a meaningful recovery even if a sense of calmness returned to the market."
He adds: "It could be the calm before the storm."
Indeed, the price of gold hit a new record high, which Razaqzada said reflected "trade war uncertainty" having escalated and he predicted "a lot of back and forth" from now until Donald Trump's April 2 "liberation day".
3.17pm: FTSE losses trimmed
Since US markets opened, the FTSE 100 and FTSE 250 has steadily been trimming its losses. The main European indices too, to a lesser extent.
This could be because US and other global investors might be seeing the UK index as offering some defensive qualities.
Aston Martin is down 6% as the FTSE 350's main automobile sector representative.
Top of the leaderboard is Next, up over 10% now, followed by some other retailers including M&S at 2.8% and Primark owner AB Foods at 1.8%.
Gold miner Endeavour is another notable riser, as it was given a boost, along with M&S, as the latest additions to UBS’s UK top picks list.
2.50pm: Tesla likely to DO(d)GE Trump tariffs
As the 6% share price rise for Tesla Inc (NASDAQ:TSLA) today indicates, it is expected to do relatively well out of the US tariffs imposed by its boss Elon Musk's new ally Donald Trump.
Deutsche Bank said out of the automobile manufacturers, "Tesla and Ford appear to be the most shielded given location of vehicle assembly facilities".
However, the bank's analysts say Ford "does face incremental exposure on imported engines".
Ford Motor Company (NYSE:F) shares are down over 3%.
General Motors Company (NYSE:GM), down 7% today, has the most exposure to Mexico, they note.
On the suppliers, "virtually all" will be subject to the derivative impact of tariffs, in DB's view.
"We expect OEMs to evaluate footprints against model/profitability and assess production levels to align with economic sensibility causing greater call-off volatility and lower net volumes."
Seating, airbags and seatbelts are not subject to the tariffs, though other suppliers may face headwinds, the analysts added.
"Looking ahead, most suppliers indicated the need to immediately pass on tariff costs to OEMs; however, it’s not clear to us whether OEMs will fully bear the burden."
2.12pm: US econ data
US GDP and PCE data is being mulled by markets.
Fourth-quarter gross domestic product came in better than expected with the final reading registering at 2.4%.
However, personal Consumption was downwardly revised to 4.0% from 4.2%.
Harun Thilak, head of global capital markets at Validus Risk Management, calls the US data "mixed".
But he adds: “Markets have shrugged off this data as the focus continues to remain on tariff-related headlines with April 2nd looming large on investors’ radar.”
1.45pm: US stocks start unconfidently
Wall Street has started in a cheerless mood, and losses are increasing in Europe as that happens.
The S&P 500, Dow Jones and Nasdaq Composite are all down between 0.5% and 0.7% in early trades.
The Footsie has now dropped 0.85%, while the DAX dangles 1.2% lower as the worst performer on the Continent due to its preponderance of carmakers.
In Paris and Madrid the declines are 0.65% and 0.4%, while in Milan it is just over 0.1%. The wider Euro Stoxx 600 has reversed 0.8% so far today.
12.25pm: Tax rises likely in autumn if economic conditions worsen
There is "a good chance", says the Institute for Fiscal Studies, that Chancellor Rachel Reeves will have to lift taxes in the autumn as economic and fiscal forecasts deteriorate between now and the autumn budget.
IFS director Paul Johnson says the deterioration of economic conditions will mean that Reeves will "need to come back for more; which will likely mean raising taxes even further".
He adds: "That risks months of speculation over what those tax rises might be" and "with no sense of a tax strategy, we have no idea which way the chancellor might turn".
Johnson says the Treasury's strenuous effort to maintain the £9.99 billion of fiscal headroom made little sense as it was not much of a cushion and left her open to such speculation and was "not conducive to a sensible policymaking process".
"It is the combination of “iron-clad” pass/fail numerical fiscal rules and next to no headroom against them that is causing so many problems, leaving fiscal policy completely exposed to economic developments outside the government’s control. That is not conducive to a sensible policymaking process.
"This is not the OBR’s fault. It is the product of the chancellor’s choices."
12.08pm: Knee deep in it
Just after midday, London's blue-chip benchmark is wading knee-deep in the red, down 0.8% at 8,623.6, close to two-week lows.
This is among the worst performing of the European indices, with Germany's DAX down a similar amount, reflecting more carmakers in its ranks, which are down on the Trump tariff announcement from last night.
In London, FTSE 250-listed Aston Martin Lagonda Global (LSE:AML) is down 5%.
Fallers are led by M&G, Schroders, Taylor Wimpey and Melrose Industries, whose shares are among a few that have gone ex-dividend today.
Next is the star in London as the clothing retailer hit the guidance upgrade button again, even though its UK store sales are remaining sluggish.
Another riser today is Close Brothers, up 7%.
Next Tuesday, the Supreme Court meets to hear arguments from lawyers representing Close Bros and FirstRand on the car finance commissions case, making a decision that could also see large amounts of compensation paid out by Lloyds, Santander and other lenders.
The Court of Appeal ruled in October that it was unlawful for these lenders to pay commissions to motor dealers without getting consens from customers buying the cars.
US stock futures are mixed, again, with the Dow Jones slightly positive, up 0.1%, while S&P 500 and Nasdaq are down 0.1% and 0.25%.
11.38am: Small cap risers
One of the big risers this morning is Naked Wines PLC, which has surged 27% now after the company unveiled a new strategy focused on cash generation, leaner operations, and long-term growth.
The AIM-listed wine subscription business said it expects to unlock £75 million from its balance sheet, primarily by liquidating £40 million of excess inventory. It is now adjusted free cash flow positive and plans to start shareholder distributions soon.
Another riding the waves higher is SRT Marine Systems PLC, where shares have made a splash, up 31% now, as the maritime surveillance technology group posted a sharp rise in revenue and returned to profit in its half-year results.
Broker Cavendish said 2025 promises to be a "transformational" year for SRT, whose shares are close to long-time highs.
11.20am: Some UK real-time weekly data
Weekly 'real-time' economic indicators have been released by the Office for National Statistics, incliding spending on Revolut debit cards, the system price of electricity and the number of flights and ship visits to the UK.
Revolut debit card spending decreased 2% last week compared to the previous week, with a 7% spending decrease in services and 3% on entertainment.
Total debit card spending increased by 4% year on year, partly caused by double-digit spending increases in utilities, health and shopping.
Meanwhile, the system price of electricity increased 17% compared with the previous week and 110% year over year.
The gas system average price increased 2% on the week and 46% on the year, according to data from Elexon and National Gas Transmission.
Ship visits were up 1%, according to exactEarth data, but down 4% versus 2024, while the seasonally adjusted number of daily UK flights increased 1% compared with the previous week and increased 2% on a year ago, according to EuroControl data.
Numebrs from the Ministry of Housing, Communities and Local Government show the total number of energy performance building certificates (EPCs) decreased 4% for new dwellings year on year, while for existing dwellings it increased by 21%.
10.40am: Tariffs tariffs tariffs
Andrew Kenningham, chief Europe economist, says German auto sales to the US could "plausibly fall by 50% or so", though "the net effect would also depend on the scope to redirect sales from the US to other countries and on any additional hit to car component producers".
Kenningham notes that German manufacturers have significant facilities in the US, which will not be as badly affected.
In contrast to Germany, the fallout for Italy, France and Spain will be "much smaller", he says.
He highlights the initial response from the EC President Ursula von der Leyen, which "seems quite conciliatory" as she said the EU will continue to "seek negotiated solutions" albeit while safeguarding its economic interests.
"That may of course change, but it is consistent with our view that any retaliation by the EU will probably be quite moderate."
10.24am: Tariffs effect on UK
The British Chambers of Commerce has warned that the 25% tariffs on imports to the US will knock the UK's biggest import to the US.
"Businesses were already looking with trepidation towards next week’s planned reciprocal tariffs before this fresh upheaval was announced," says William Bain, the BCC's head of trade policy.
He notes that around half of the cars purchased in the US are imported, so this will pass through into much higher costs for US consumers too.
"The impact of this on the UK car industry cannot be overstated," he says, with the UK’s making £6.4 billion from auto sales to the US in 2023, led by cars from Aston Martin, Jaguar and Land Rover.
"Piling these tariffs on top of the others already expected on 2 April, will sap business confidence and add further uncertainty for both UK and US firms," he says.
The BCC says it urges the UK and US governments to "continue intensive dialogue over the coming days and weeks to reach a mutually beneficial agreement on technology and trade" to "provide certainty for business and consumers alike on the future tariff landscape and remove unnecessary levies already in place".
9.34am: How successful are tariffs?
Tariffs are understandably dominating market sentiment this morning, says market analyst Kathleen Brooks at XTB.
While Trump has said that there will be no exemptions this time around, Brooks says, "who knows if the President will do what he says" and that it "takes a long time to dismantle a supply chain and move lock-stock to the US for production".
However, she notes that tariffs can be effective at changing consumer behavior, such as the 1963 ‘chicken tax’ on imports to the US of foreign-made light trucks that persists to this day, with US light trucks and pick-ups mostly made domestically these days even though the tax brings in less than $100 million a year.
"Thus, if President Trump is trying to fund long term tax cuts with tax levies, it may not work out."
Brooks also notes that Volkswagen, which has previously said it would only be minimally affected by the US tariffs, is outperforming other European car makers today and is higher by 9% in the year to date, while BMW is lower by 3% YTD.
Summing up the market situation, Brooks says: "although European stocks are broadly lower on Thursday, dare we say it, this is not a major rout", though auto shares are being accompanied by those in luxury companies and tech firms.
"Without a doubt, there has been a notable shift in mood in recent weeks as tariffs loom large, but we still think that powerful themes including European rearmament and an infrastructure boom could provide an independent boost for European stocks regardless of what the US throws at the continent.
"It is a challenging environment, but there is still life in the European economy, and by standing on their own, without relying on the US, they could have a chance at bolstering their long-term future."
She points out that April is traditionally a strong month for European stock markets.
9.05am: More tariff detail
It is probably worth noting that the US imports around eight million cars a year and an almost uncountable number of car parts and components, which equates to $240 billion in trade.
President Trump framed the auto tariffs as “permanent”, and the tariffs will apply not just to fully assembled cars, but also to key auto parts, including engines, transmissions and electrical components with the tariffs on auto parts set to take effect no later than May 3.
President Trump separately said that reciprocal tariffs were still coming on April 2, although he later added that these will be “very lenient”, while also mentioning upcoming tariffs on pharmaceuticals and lumber.
Trump also said that Republicans in Congress would work on approving tax deductions on car interest rate payments.
8.55am: Swift condemnation for tariffs, responses mulled
The US tariffs have attracted condemnation from the European Union and other global leaders.
Canadian prime minister Mark Carney called it a "direct attack" on Canadian workers. "We will defend our workers, we will defend our companies, we will defend our country, and we will defend it together," he said.
Japanese Prime Minister Shigeru Ishiba said Tokyo will put "all options on the table in considering the most effective response".
European Commission president Ursula von der Leyen described the move as "bad for businesses, worse for consumers in the US and the European Union".
She added: "We will now assess this announcement, together with other measures the US is envisaging in the next days. The EU will continue to seek negotiated solutions, while safeguarding its economic interests."
Tariffs may add $3,000 to US vehicle costs, analysts at TD Economics warned, noting that the US is a net exporter of manufacturing goods to Canada, particularly autos.
North American auto parts cross borders multiple times before assembly, with Canada supplying 8-9% and Mexico 20% of US vehicle consumption.
As well as raising car prices by an estimated $3,000, the tariffs are also likely to trigger retaliatory actions, and disrupt trade, harming all three economies, the analysts said.
8.43am: Carmakers hard in reverse
European carmakers are hard in reverse this morning, following President Trump's tariff announcement last night, which has sent all European stock indices heavily into the red.
Mercedes-Benz has dropped 5.7%, Porsche 5.5%, BMW 4.6% and Volkswagen 3.9%, while Fiat and Chrysler owner Stellantis was down 5.6%.
Shortly after the US market close, Trump signed an executive order imposing 25% tariffs on all foreign-made cars, light trucks, and specific auto parts, set to take effect on April 2.
The White House estimates the new duties could generate $100 billion annually.
Trump called the move a step toward "Liberation Day" for the US economy, arguing it would promote domestic growth.
While the tariffs primarily target non-US automakers, US domestic giants such as GM, Ford, and Stellantis, which manufacture vehicles abroad, warned of rising supply chain costs.
Germany's DAX index has plunged 1.2% so far this morning, Italy's FTSE MIB is down 1%, while France's CAC 40 and Spain's IBEX have dropped 0.9%.
8.31am: Next hits new high as plaudits stream in
Next shares have risen to a new all-time high this morning, surging over 8% to above 10,880p for the first time.
The shares hit 10,500p in September before trending down to just over 9,000p in January, when the slide was reversed by a trading update.
Today the plaudits are streaming in.
Analyst Anubhav Malhotra at Panmure Liberum says: "Next continues to avoid the doom and gloom of UK retail," with a 2% PBT guidance upgrade this morning, driven by better than expected sales growth.
"The upgrade is driven by better online growth, where both UK and International businesses are performing above expectations.
"We think Next’s improved online proposition with more third-party brands, new own-brands, new licenses, and faster and more accurate delivery is allowing it to take share from struggling pure-play online incumbents."
Aarin Chiekrie, analyst at Hargreaves Lansdown, says: "Next continues to deliver for investors, with yet another profit upgrade continuing its hot streak."
He notes that online sales and overseas sales were "the driving force" behind the performance, helping to offset small declines in retail stores, "which have come under a bit of pressure given the structural decline of the high street".
Overseas sales gree at "an eye-watering pace", up at double-digit rates, he notes.
Richard Hunter at Interactive Investor says: "Next has a reputation for under-promising and over-delivering, but its outlook statement this time is perhaps unusually upbeat."
He adds that "Next naysayers have missed out on some stellar returns, but may not yet have entirely missed the boat.
"The share price has risen by 122% over the last five years and by 59% over the last three. The performance over the last 12 months has been a more pedestrian increase of 7%, as compared to a gain of 9.6% for the wider FTSE100, as the price has caught up with its historic valuation, giving extra punch to the warm reception which the shares have received at the open."
With the general City consensus being a "strong hold", he says if the retailer's "level of inexorable progress is maintained as has been the case to date, those who doubt the company’s prospects may continue to do so at their peril".
8.15am: FTSE dives at the open
The FTSE 100 has dived 59 points or 0.7% to 8,630.6 in opening trades on Thursday.
This despite strong early gains for Next, up 8.3% on the back of a strong set of results and lifted guidance for the year ahead.
However, the index is being hit by fall for all but two of its largest companies, with AstraZeneca, Shell, HSBC, Rio Tinto and BP all down.
Shares of a number of large companies have also gone ex-dividend today, contributing to just over 13 points of the decline. These are British American Tobacco, SEGRO, Standard Chartered, Smith & Nephew, Taylor Wimpey, Melrose Industries, Schroders, M&G, Prudential and Games Workshop.
7.56am: AJ Bell sells part of its non-platform business
AJ Bell PLC (LSE:AJB) has struck a deal to sell part of its non-platform pension business for £25 million to buy-and-build pensions group InvestAcc Group Ltd (LSE:INAC).
The Platinum SIPP and SSAS business has 3,600 customers with £3.2 billion of assets under administration, which will transfer to InvestAcc on completion.
FTSE 250-listed AJ Bell will receive £17.5 million of cash on completion, expected in the second half of the year, plus £1 million in new InvestAcc shares. The remaining £6.5 million cash payment is subject to certain conditions.
7.41am: Next retail detail
In its results, Next said it is budgeting for UK retail (as in non-online) full-price sales to fall 2% on a like-for-like basis, with the addition of new store space expected to add 1.7% to retail sales, which still means UK retail full-price sales are expected to be down 0.3% versus last year.
UK retail profit in the year ahead is expected be around £180 million, down from £237 million last year, with a 1.3% reduction in net margin.
This reduction in profit is mainly due to wage inflation and the increase in employer’s National Insurance, with a 1.1% negative, the expected reduction in like-for-like sales (-0.5%), partly offset by price increases, operational efficiencies and cost savings (+0.3%).
7.33am: Next reports first £1bn profit and hikes guidance
In a surprise to no-one who's been following the company for the past few years, Next PLC (LSE:NXT) has hiked its guidance for the year ahead.
Oh, and it's also announced its first billion-pound annual profit, as expected, £1.011 billion to be precise.
With full-price sales in the first eight weeks of the new financial year ahead of expectations, it said it now expects to grow sales faster and make a profit of around £1.066 billion in the year to January 2026.
There's also a new dividend and a share buyback on top.
7.16am: FTSE 100 set to tank on Trump's tariffs hardballing
The FTSE 100 is set to tank on Thursday after Donald Trump showed he means business on tariffs overnight, sending Wall Street and Japanese stocks tumbling.
A 25% tariff on cars from overseas was confirmed by the US President ahead of his expected wide-ranging 'reciprocal' levies on other goods from around the world next week.
London's blue-chip index has been predicted to plunge over 40 points at the open, having added just under 26 points to close at 8,689.6 yesterday.
US stocks finished Wednesday’s session in the red as Trump flagged that he would impose the tariffs on the auto industry later in the day.
The Nasdaq led the declines, falling 2%, weighed down by declines of more than 5% in both Tesla and Nvidia, while the S&P 500 fell 1.1% and the Dow Jones was down 0.3%.
This morning, Japan's Nikkei is down 0.6%, led by falls for Mazda and Subaru, while Chinese stocks are slightly higher.
7am: What to watch on Thursday
Retail bellwether Next has already said it expects to report its first £1 billion profit, with attention all on what it says about recent trading and the outlook for the coming months...read more
Announcements due 27 March:
Finals: Airea PLC, Arbuthnot Banking Group PLC, Chesnara PLC, Empresaria Group PLC, Franchise Brands PLC, International Public Partnerships Limited, Next PLC, Playtech PLC, Robinson, Tribal Group
US earnings: Lululemon Athletica Inc, Walgreens Boots Alliance
AGMs: Berkeley Energia Ltd, Challenger Energy Group PLC, React Group PLC, Wynnstay Group
Economic news: M3 Money Supply (EU), GDP (US), Initial Jobless Claims (US), Goods Trade Balance Adv (US), Pending Home Sales (US)
Ex-dividends to reduce FTSE 100 by: 13.1 points (British American Tobacco, SEGRO, Standard Chartered, Smith & Nephew, Taylor Wimpey, Melrose Industries, Schroders, M&G, Prudential, Games Workshop)