FTSE 100 declines as US economic data raises concerns

On March 28, 2025, the FTSE 100 index in London experienced a decline, finishing 7.27 points lower at 8,658.85. This downturn was attributed to disappointing economic data from the United States, as well as growing concerns over tariff issues affecting global financial markets. These challenges overshadowed some stronger performances within London equities, particularly in the retail and utilities sectors, which benefited from a better-than-expected 1% increase in retail sales reported for February by the Office for National Statistics. While economists had anticipated a decline, the rise in retail sales provided some positive impetus for the market but was not sufficient to prevent the overall drop in the FTSE. In the broader market, the Cac 40 experienced a decline of 0.93%, while Germany’s Dax index decreased by 0.98%. Chris Beauchamp, chief market analyst at IG, noted that US stocks had hit a one-week low, coupled with falling oil prices and a surge in gold prices as volatility in the markets increased. This market volatility was exacerbated by renewed fears around tariffs, particularly following US President Donald Trump’s announcements concerning auto tariffs, which unsettled investors and led to a reduction in equity exposure. Currency fluctuations were also observed, with the British pound easing slightly against both the US dollar and the euro, amidst speculation about potential interest rate cuts. By market close, the GBP/USD rate fell to 1.294, while it dipped to 1.195 euros. In company news, WH Smith shares dropped after the retailer announced the sale of its 480 high street shops to Modella Capital for approximately £76 million, significantly less than the previously estimated £100 million. Conversely, National World saw a rise in share price after reported interest from Chelsea FC owner Todd Boehly regarding a possible deal, bridging speculation of a bidding war amidst previous takeover motions. SSE shares increased following the appointment of Martin Pibworth as the new CEO, succeeding Alistair Phillips-Davies. The decline in oil prices, attributed to the ongoing uncertainty regarding trade relations, saw Brent crude oil prices decreasing to $72.64 per barrel at the close of London markets. Significant declines in major firms were observed, with the largest fallers including Melrose Industries, IAG, Entain, Barclays, and Rolls-Royce, all of which saw notable drops in their share prices due to the broader fiscal concerns affecting investor confidence. This combination of factors led to a complex and challenging trading environment as retailers thrived against a backdrop of international economic trepidation.