UK Markets Experience Downturn Amid Anticipation of US Tariff Exemptions

London’s primary stock index receded on Thursday, yet it remained poised for a robust weekly increase on the final trading day of a shortened week, largely fueled by the prospect of potential tariff waivers from the U.S. President.

As of 10:40 GMT on Thursday, the FTSE 100 index showed a decline of 0.7%, while the mid-cap FTSE 250 index registered a 0.4% decrease. However, their weekly performance indicated gains of 3.1% and 3.6%, respectively.

Market participants were preparing for an extended break, with UK markets closed for Good Friday and Easter Monday.

The automobiles and parts sector spearheaded Thursday’s declines, plummeting by 3.2%.

Defense sector shares Rolls Royce and BAE Systems experienced setbacks of 2.8% and 2.6%, respectively, exerting considerable downward pressure on the benchmark index.

The precious metals and mining index edged down by 1% after a sequence of eight consecutive sessions of gains. Over the course of the week, this sub-index surpassed its counterparts, surging by 7.6%, bolstered by rising gold values driven by safe-haven demand.

Earlier in the week, British equities gathered steam following indications from the U.S. regarding possible exemptions on auto-related tariffs for Mexico, Canada, and other regions.

European equities also saw gains as there were hints of auto-related tariff relief.

Attention is also focused on the European Central Bank’s interest rate decision at 1215 GMT. Speculation suggests that traders anticipate a quarter-point reduction by the central bank to mitigate the impact of U.S. tariffs on the struggling European Union economy.

Concerning individual stocks, Sainsbury’s shares increased by 2.6% after the UK’s second-largest food retailer projected stable profits for the year, while also committing to maintaining its competitive advantage amid potential price wars.

Man Group’s shares fell by 3% after the hedge fund disclosed a decrease of approximately $5.6 billion in assets under management during the two weeks leading up to April 14.

Deliveroo, the British meal delivery firm, saw its shares rise by 3.7% following a 7% surge in first-quarter orders, surpassing the 6% growth recorded in the fourth quarter of 2024.