The FTSE 100 retreated from record highs set earlier this week, as global markets recoiled from US President Donald Trump’s tariff policies, amid concerns over a global trade war.
London’s blue-chip index tumbled 112 points to finish the day at 8,759, or a 1.27% fall, its biggest since October 8 last year.
In the US, the S&P 500 plummeted more than 1.6% while the Dow Jones was 1.7% in the red as UK markets closed.
It came after Mr Trump moved forward with planned tariffs against Canada and Mexico, and doubled the levy on Chinese imports.
After initially pausing the tariffs, Mr Trump said that starting just past midnight local time, imports from Canada and Mexico would now be taxed at 25%, with Canadian energy products receiving 10% tariffs.
In addition, the 10% tariff that Mr Trump placed on Chinese imports in February is doubling to 20%.
The move was followed swiftly by retaliatory action from Canada and China.
The falls meant the S&P 500 returned to levels seen before November’s US election, with the so-called Trump Bounce, as coined by some investors, wiped out entirely.
Sterling was up 0.2% against the dollar at 1.2723, while it was roughly 0.3% down against the euro at 1.2079.
In Europe, France’s Cac 40 fell 2.1%, and in Frankfurt the Dax fell 3.5%.
In company news, Greggs revealed a jump in sales and profits in 2024 as it launched new shops, extended its opening hours and raised prices.
But shares nonetheless plunged as the group signalled that sales growth was slowing, with the stock finishing 13.2% down.
Meanwhile, investors in Aberdeen Group cheered a name change from its previous moniker, Abrdn, as the company also reported that profit grew 2% to £255 million.
The 200-year-old fund management giant was previously known as Standard Life Aberdeen before adopting Abrdn in 2021, in a rebrand that prompted widespread mockery.
Shares in the company rose 7.7%.
The biggest risers on the FTSE 100 were Intertek, up 225p to 5380p, Severn Trent, up 71p to 2506p, Marks & Spencer, up 9.9p to 374.6p, Tesco, up 9.7p to 387.7p, and CocaCola HBC, up 84p to 3434p.
The biggest fallers were Ashtead, down 406p to 4393p, IAG, down 24p to 321.2p, Scottish Mortgage Investment Trust, down 65p to 969p, Polar Capital Technology Trust, down 20p to 316p, and BP, down 25.7p to 407.05p.
