- FTSE 100 down 1.1%; FTSE 250 down 1.8%
Feb 3 (Reuters) - Britain's benchmark FTSE 100 dropped on Monday and was on track for its worst day in almost four months amid fears that U.S. tariffs could fuel a global trade war.
The FTSE 100 was down 1.1% at 8,574.16 points by 1140 GMT, set for its worst day since Oct. 8.
It had a stellar January, rising 6.1%, its best month in over two years.
The domestically-focussed mid-cap FTSE 250 lost 1.8% on the day.
British stocks joined a global selloff sparked by fears that U.S. President Donald Trump's tariffs on Canada, Mexico and China mark an opening salvo in a trade war that could curb economic growth internationally.
Europe's benchmark STOXX 600 was down 1.2%, while Wall Street futures slumped over 1.3%.
All the FTSE 250 sub-sectors slid more than 2.5%, with tariff-sensitive sectors such as automobiles, and consumer-focussed sectors, including beverages and personal goods, taking a major hit.
Safe-haven assets were in demand, with yields on European and gilts falling. EUR/GVD
"The fact markets have got the jitters implies investors previously weren't entirely convinced that Trump would go ahead with tariff threats. Instead, it was presumed these threats would simply be a bargaining tactic," said Russ Mould, investment director at AJ Bell.
"Trump talks a lot but doesn't always follow through; perhaps this time he wants people to take him more seriously, hence why the prospect of negotiations has been thrown out of the window. Fight first, talk later."
On the economic front, British factories reported another tough month in January as output, new orders and employment all fell, PMI data showed.
The Bank of England meets on Thursday and is expected to cut interest rates by 25 basis points.
Reporting by Pranav Kashyap in Bangalore; Editing by Sonia Cheema
Source: Reuters