FTSE set for another dismal day after Asian stocks rout sees Hang Seng suffer biggest fall since 2008

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European and US stock markets are set to face another week deeply in the red, after Asian stocks plummeted in the aftermath of China’s retaliation to Donald Trump’s tariffs.

Last week’s levies placed on almost every nation across the planet by the US president led to a sharp collapse in equities.

But any hope of stability at the start of a new week was wiped away by Hong Kong’s Hang Seng plummeting 13 per cent on Monday – its biggest fall since 2008.

The Nikkei 225 in Japan fell almost eight per cent and the Asian Dow 12.1 per cent, in a continuation of the scenes which last week saw more than $4.9 trillion (£3.8tn) wiped off equities markets worldwide after Trump’s “Liberation Day” speech, according to analysis by AJ Bell.

On Monday, the FTSE 100 opened three per cent lower – but that quickly dropped well below the five per cent mark, with the FTSE 250 charting a similar course in early trading. The pound was up very slightly against the dollar, a quarter of a percent up to $1.2925 to the pound.

Commodities and mining giant Glencore were the biggest fallers in the FTSE 100, down 13 per cent just after opening, with just all 100 share prices in the London Stock Exchange’s biggest index down by at least two percent within minutes after opening.

Looking further afield, in Europe the main indices were similarly hammered again.

The CAC 40 in France was down more than six per cent in early trading, with Germany’s DAX more than seven per cent in the red. US futures trading was showing a 4.8 per cent drop in the S&P 500, five hours ahead of opening Stateside.

RSM chief economist Joe Brusuelas told Yahoo Finance that there could yet be even worse to come, particularly if the EU follows China’s lead in presenting retaliatory measures against the US.

“I’m telling you right now, the market has not priced that in,” he said. “They fundamentally think this is just a repeat of 2018. There’s a lot more damage that could go on here.” Mr Brusuelas said the US Treasury Secretary Scott Bessent should take steps to “calm” the markets after the administration’s revelation of the simplistic formula which led to the value of tariffs for different nations.

“That nonsensical introduction of the [tariffs] formula. It’s the loss of credibility on the part of the administration, the loss of confidence of markets in them — that’s what’s causing this.”

Analysis from KPMG predicted that fallout from the US tariffs would cost the UK £22bn, taking 0.8 per cent off the economy across the next two years.