Escalating U.S.-China Tariff War Shakes Global Confidence, Drives Flight to Safety, and Fuels Recession Fears:

Image Source : Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went up around 0.46% on 11 April 2025.  

Macro Update:  BP warned of weak first-quarter gas trading earnings and rising net debt, sending its shares lower amid heightened scrutiny following activist investor Elliott Management's growing stake. Meanwhile, the UK economy showed resilience with a 0.5% GDP growth in February, the strongest in 11 months, surpassing expectations despite looming U.S. tariffs. In corporate developments, Shein secured regulatory approval for a London IPO, marking a key milestone in its expansion plans, while Tesco cautioned on falling profits due to increased market competition, leading to a sharp share decline. Elsewhere, British stocks rebounded after the U.S. paused tariff hikes for 90 days, though Ofgem rejected a delay penalty exemption for the National Grid-Iberdrola power project, citing insufficient justification despite global supply chain disruptions. 

Top Market Movers: Among top gainers on FTSE 100 index, Fresnillo PLC (LSE: FRES) witnessed a rise of 6.77% followed by Tesco PLC (LSE: TSCO) which gained around 3.79%. 

Commodity Update: The U.S. dollar weakened on Friday as declining confidence in the U.S. economy drove investors toward safe-haven assets like the Swiss franc, yen, euro, and gold. Gold hit a record high, rising 1.92% to $3,238.40, while silver gained 1.37% to $31.18, and copper rose 0.49% to $8,949.20. Brent crude fell 0.50% to $63.02 amid concerns over the prolonged U.S.-China trade war impacting global demand. 

Our Stance: Global markets remain on edge as the U.S.-China trade war intensifies, with China hiking tariffs on U.S. imports to 125% in response to the U.S. raising its own to 145%, despite a temporary reprieve for other partners. The escalation has triggered a sharp selloff in global equities and bonds, while fears of recession grow amid shaken investor confidence in U.S. assets. The U.S. dollar weakened significantly, hitting multi-year lows against safe-haven currencies like the Swiss franc and yen, while gold surged to a new record high. Asian currencies gained modestly, reflecting a shift away from the dollar, but regional equities remained under pressure. Oil prices held steady but were headed for a second straight weekly loss, underscoring broader concerns over global demand in a deteriorating trade environment. Overall, the market reaction signals rising anxiety over geopolitical friction potentially derailing global economic stability. 

FTSE 100 

The FTSE 100 rose 0.51% on Friday and trading at 7,953.41, forming a bullish candlestick pattern. Despite the gains, the index remains below a key horizontal resistance level, indicating that bearish momentum persists. It continues to trade beneath both the 21-period and 50-period Simple Moving Averages, highlighting sustained downward pressure. The RSI sits at 36.07, reflecting the prevailing bearish sentiment. Caution is warranted—further downside may follow if support breaks, while a move above resistance could signal a short-term rebound. 

Data Source - EODHD/Others