London Markets: FTSE 100 falls as trade fears show no sign of abating

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U.K. stocks lost ground 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, -0.84% fell 0.7% to 7,626.52, after closing 1.7% higher on Friday and rising 0.6% last week. The blue-chip gauge is down 0.8% this year.

The pound GBPUSD, -0.1508% traded at $1.3242, down modestly 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.

“The United States is insisting that all countries that have placed artificial Trade Barriers and Tariffs on goods going into their country, remove those Barriers & Tariffs or be met with more than Reciprocity by the U.S.A. Trade must be fair and no longer a one way street!” Trump said in a tweet.

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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% jumped 8% in their trading debut for the FTSE 100’s biggest gain.

Earlier Monday, financial holding company Old Mutual PLC OML, +0.00% 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 oil giants Royal Dutch Shell PLC RDSB, -0.63% RDS.B, +4.38% and BP PLC BP., -1.51% BP, +3.67% fell 0.6% and 1.7%, respectively, as Brent crude futures LCOQ8, -0.98% declined. Oil traders are continuing to react last week’s agreement among key producers to lift production caps.