FTSE 100 Index Down As Trade Tariffs Have Their Say

Summary:
• The FTSE 100 index is a victim of circumstances as UK equities suffer the consequences of a trade tariff war they are not party to.

The FTSE 100 Index (INDEXFTSE: UKX) declined on Monday, reflecting a broader depreciation across global financial markets as a raft of new trade tariffs took effect. The Index was down by 1.5% at 8,607 points at the time of writing, as the US, China, Canada and Mexico ready for an uptick in trade barriers this week.

UK’s trade relations with the US is untampered, likely forestalled by Prime Minister Keir Starmer’s talks with US President Donald Trump. However, both countries are exposed to the ripple effects of a broader tariff ecosystem that touches on their other trading partners. Furthermore, Trump previously threatened tariffs against the European Union, the UK’s single-largest export destination. Such a set up will likely continue putting a strain on UK companies and the FTSE 100 Index.

Unilever was the biggest gainer among the FTSE 100 Index’s top ten largest stocks, gaining 2.69%. Other notable large-cap gainers were BP (+1.5%), National Grid (+3.1%). However, it was a bad outing for Rolls Royce, which went down by -6.8%, Barclays (-5.7%) and Lloyds Banking Group (-2.8%). Rolls Royce was mostly down as a result of profit-taking following last week’s rally to all-time highs.

There are no high-impact UK economic data for much of the week, save for Friday’s release of GDP data. That could leave the FTSE Index susceptible to downward pressure in the intervening period, as the focus will likely be on the tariff ecosystem.

FTSE 100 Index Prediction

FTSE 100 Index pivots at 8,660 points and resistance at that level signals that the downside will likely prevail. With the sellers in control, the index will likely go lower to the first support at 8,600. Action below that level will signal the onset of a stronger downward momentum, potentially extending the decline to test 8,576 points.

Alternatively, moving above 8,660 points will signal a momentum shift to the upside. With the buyers in control, FTSE Index is likely to go higher and encounter the first resistance at 8,695 points. Breaking above that level will invalidate the downside narrative, with the resulting momentum potentially taking action higher to test 8,735.