- FTSE 100 down 2.8%, FTSE 250 fell 2.7%
- Healthcare stocks drop sharply due to potential tariffs
- UK 30-year gilt yields surge
April 9 (Reuters) - British equities tumbled on Wednesday led by declines in healthcare and energy stocks, as U.S. tariffs took effect, diminishing hopes of concessions from President Donald Trump and deepening fears of its damage on the global economy.
As of 1025 GMT, the blue-chip FTSE 100 index dropped 2.8% and the midcap index slid 2.7%.
U.S. President Donald Trump's sweeping tariffs, including massive 104% duties on Chinese goods, have upended a global trading order that has persisted for decades.
Although Britain faces the lowest import duty rate of 10%, the Bank of England has warned that global economic risks have increased and the UK remains particularly vulnerable as an open economy with a large financial sector.
Healthcare stocks fell sharply alongside European peers after Trump signalled imminent tariffs for the sector. AstraZeneca, GSK and Hikma Pharmaceuticals were among the worst performers on FTSE 100, dropping between 2.5% and 5.3%.
An index of UK's pharma and biotechnology companies fell 4.8% to its lowest level in more than three months.
The energy index dropped 3.2% as oil prices fell for a fifth consecutive day to their lowest since February 2021, as the trade war and its potential impact on global economic growth stoked worries over energy demand.
Capping the losses, precious metal miners climbed 1.7%, benefiting from rising gold prices as investors sought safe-haven assets amid intensifying trade and recession fears.
Assura gained 5.5% after a KKR-Stonepeak consortium agreed to buy the healthcare REIT for 1.61 billion pounds ($2.06 billion).
Meanwhile, British 30-year government bond yields surged to their highest since July 1998, following a sharp overnight rise in 30-year U.S. Treasury yields driven by Trump hitting China with 104% tariffs.
Interest rate futures now price in Bank of England rate cuts of 85 basis points this year. A cut of at least 25 basis points at the May 8 meeting is considered a near certainty, while there is a roughly 10% chance of a larger 50-basis-point reduction.
Before Trump detailed his tariff plans, markets saw only a 50% chance of a May rate cut and just over 50 basis points of loosening through the end of 2025.
Reporting by Ragini Mathur in Bengaluru; Editing by Leroy Leo
Source: Reuters