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UK Shares Fall as US Tariff Concerns Weigh but Q1 Performance Holds
Sandip Raj Gupta
31/Mar/2025
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The FTSE 100 declined 0.9% as US tariffs sparked concerns, with mining and financial stocks taking a hit.
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Defensive sectors like utilities and consumer goods outperformed, while UK exemptions from tariffs remain uncertain.
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Corporate updates included Aston Martin’s F1 stake sale, Pets at Home’s pressured profits, and Primark CEO Paul Marchant’s resignation.
The UK stock market opened the week lower, as the FTSE 100 dropped 0.9% on Monday, mirroring a global selloff triggered by US tariff concerns. Investors reacted to President Donald Trump's firm stance on imposing reciprocal tariffs, adding uncertainty to UK trade relations.
US Tariffs Impact UK Stocks
Despite UK Prime Minister Keir Starmer's productive talks with Trump, the US president reaffirmed his plans to impose tariffs on all countries starting April 2. This led to a decline in UK stocks, particularly in export-driven sectors such as mining and financials.
Mining stocks were among the worst hit, with Anglo American, Glencore, and Rio Tinto falling over 2.5%. The new tariffs could lower global metal prices, impacting mining profits and investor sentiment.
Financial stocks also faced strong selling pressure, as investors moved away from riskier assets amid growing economic uncertainty.
Defensive Sectors Provide Stability
Despite the broader market downturn, defensive stocks outperformed. Sectors such as utilities and consumer goods attracted investors looking for stability amid volatile conditions. These stocks tend to perform well during periods of economic uncertainty, as they provide essential goods and services.
Key Corporate Developments
Beyond the tariff-driven selloff, several corporate announcements shaped UK stock movements:
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Aston Martin confirmed plans to sell its Formula One team stake due to strong investor interest.
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Pets at Home reported stable but pressured profits, reflecting rising operational costs.
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Thames Water is in advanced talks with private equity firm KKR for new funding, boosting investor confidence.
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Primark CEO Paul Marchant resigned immediately, as confirmed by parent company AB Foods, adding uncertainty to the retailer's future leadership.
FTSE 100’s Q1 Performance Remains Positive
Despite the recent dip, the FTSE 100 is still up around 5% for the first quarter, reflecting stronger market performance over the past three months. Analysts suggest that UK stocks remain resilient, supported by corporate earnings, economic stability, and investor optimism.
Market Outlook
Looking ahead, investors will be closely watching UK-US trade discussions and further policy developments related to tariffs. While short-term market volatility may persist, the long-term outlook remains cautiously optimistic, especially if diplomatic efforts lead to trade exemptions for the UK.
In conclusion, UK stocks have taken a hit from US tariff concerns, but Q1 gains remain intact, showcasing the market’s underlying strength despite global uncertainties.
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