British Stocks Stumble Amid US-China Trade Tensions

British stocks suffered significant losses as investors sought safer assets following heightened US-China trade tensions. The FTSE 100 index dropped almost 5%, driven by new tariffs between the economic giants. Investors flocked to government bonds, and sectors like aerospace, defence, and banking witnessed sharp declines.

British stocks plunged on Friday as escalating trade tensions between the United States and China rattled global markets. Investors fled risky assets, resulting in a nearly 5% drop in the blue-chip FTSE 100 index, marking its largest daily slide since the pandemic-driven sell-off in March 2020.

The sell-off was prompted by China's announcement of retaliatory tariffs against the U.S., which led to fears of a global recession. As a result, investors moved towards safe havens such as government bonds, driving down both the blue chip and midcap indexes to their biggest weekly declines in five years.

Certain sectors took harder hits, with aerospace and defence stocks falling by 9%, banking stocks dropping 6.3%, and oil and gas shares declining 7.1% amid a sharp drop in oil prices. The construction industry in Britain also reported a significant downturn as civil engineering projects declined sharply last month.

(With inputs from agencies.)