FTSE 100 tanks below six-week amid escalation in US-China trade war

Leading British shares fell to six-week lows on Thursday as renewed trade tensions between the United States and China pressured the index. The FTSE 100, whose members generate more than two-thirds of their earnings from abroad, was 0.4 per cent lower by 0841 GMT. The midcaps gave up 1 per cent.

Industrials, miners and Asia-exposed stocks led the fall on the main index after U.S. President Donald Trump accused China of breaking the deal they had reached in trade talks. Luxury brand Burberry, which is vulnerable to a hit to the Asian economy, gave up 2 per cent.

"Considering the ticking trade clock, investors are going to be hyper-vigilant for any signs that the US and China might be able to pull back from the brink," Spreadex analyst Connor Campbell said. "However, any news likely won't be until this afternoon, leaving the European indices to wallow in thoughts of the worst-case scenario."

All bar two sectors were in negative territory and the index was on course for its biggest weekly drop since January. The two categories left unscathed were healthcare and consumer staples as investors flocked to so-called defensive stocks, seen as a safer bet at times of uncertainty.

Energy supplier Centrica, oil heavyweight BP and insurer Admiral all dipped as they traded ex-dividend, heavily weighing on the blue-chip bourse. However, an upbeat first-quarter update showing a rise in net written premiums helped insurer RSA inch 1.5 per cent higher.

Another gainer was Ocado after it inked a deal with Morrisons for more operational capacity following a fire at one of its distribution centres. It separately also said it bought a minority stake in robotics start-up Karakuri. Morrisons, on the other hand, lost 1.4 per cent after it blamed political and economic uncertainty for a slowdown in its quarterly sales growth.

Small-cap Superdry shares erased initial losses of up to 7 per cent to rise 3 per cent as markets focused on founder Julian Dunkerton's efforts to rebuild the fashion brand rather than the latest profit warning. Acacia Mining jumped 5.6 per cent after a rise in gold production in its disputed Tanzanian gold mine.

(With inputs from agencies.)