U.K. stocks finished with sizable losses Monday, with analysts blaming the drop on fresh worries about a potential global trade war, after the U.S. over the weekend continued its tough talk on that front.
How markets are moving
The FTSE 100 UKX, -2.24% fell 2.2% to end at 7,509.84, after closing 1.7% higher on Friday and rising 0.6% last week.
The blue-chip gauge suffered its biggest percentage drop since early February, according to FactSet data. It’s down 2.3% this year, having fallen to levels last seen in early May.
The pound GBPUSD, +0.0302% traded at $1.3270, little changed from $1.3264 late Friday in New York.
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What’s driving markets
Investors are still concerned that trade tensions between the U.S. and major trading partners such as China and the European Union could develop into a big drag on the global economy.
President Donald Trump on Sunday issued new threats against America’s trade partners, calling for them to remove trade barriers and tariffs, or face the consequences.
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In addition, Trump plans to bar many Chinese companies from investing in U.S. technology firms, and by blocking additional technology exports to Beijing, said a Wall Street Journal report citing people familiar with administration plans. The twin initiatives are set to be announced by the end of the week.
What strategists are saying
“The global battle over trade is going to impair global economic growth, and it is also rattling investors’ confidence,” said Naeem Aslam, chief market analyst at Think Markets UK, in a note.
“These trade tensions remain the main focal point for investors today, as the situation has intensified further.”
Stock movers
On the up side, shares in wealth manager Quilter PLC QLT, +0.00% finished 4.8% higher in their trading debut for the FTSE 100’s biggest gain.
Earlier Monday, financial holding company Old Mutual PLC OML, +0.96% said it had priced the initial public offering of its Quilter business, previously known as Old Mutual Wealth Management, at 145 pence per share.
Shares in Carnival PLC CCL, -11.13% CCL, -7.71% sank 11% for the FTSE 100’s largest drop after the cruise operator lowered its profit guidance for the year.
Miners Glencore PLC GLEN, -4.69% and Anglo American PLC AAL, -4.53% were also big losers, dropping 4.7% and 4.5%, respectively, as investors seemed to bet that trade-related tensions could weigh on global growth and dent demand for commodities.
Shares in oil giants Royal Dutch Shell PLC RDSB, -3.08% RDS.B, -3.32% and BP PLC BP., -3.40% BP, -3.23% fell 3.1% and 3.4%, respectively, as Brent crude futures LCOQ8, -1.77% declined. Oil traders are continuing to react this past weekend’s agreement among key producers to lift production caps.
Off the FTSE 100, shares in Countrywide PLC CWD, -29.94% dived 30% after the company issued a warning on a key first-half profit figure — earnings before interest, taxes, depreciation, and amortization, or EBITDA.
The provider of estate-agency and property services said adjusted EBITDA will come in around £20 million lower in the first half compared with the same period last year, and it does not expect the shortfall to be recovered in the year’s second half.
The discouraging update weighed on other housing-related stocks, with home builder and FTSE 100 component Berkeley Group Holdings PLC BKG, -1.62% down 1.6%.