FTSE100 and world stock markets continue to plunge after Donald Trump says he won't back down on tariffs

This follows stock markets plunging overnight in Asia, while investors are braced for further sharp falls in New York as the fallout from Trump’s tariff announcement enters its second week.

Asian stocks across the board were sinking to new lows after Mr Trump said he will not back down on his sweeping import taxes unless countries even out their trade with the US.

China has now accused the US of unilateralism, protectionism and economic bullying over tariffs.

In Japan, the Nikkei 225 index, which tracks the country’s top 225 listed companies, was plummeting by about 6.5% on Monday morning. The index was close to dropping below its lowest level since August last year.

China’s Shanghai Composite, which tracks the movement of shares on the country’s main stock exchange, had dropped more than 8%, while Hong Kong’s Hang Seng index was plunging by more than 12%.

The latest turmoil comes after the UK’s top stock index, the FTSE 100, on Friday suffered its biggest single-day decline since the start of the Covid-19 pandemic.

And global financial markets were on track for another day of steep losses.

The US’s S&P 500 and Dow Jones are both expected to open lower on Monday after a two-day sell-off which saw billions of dollars estimated to have been wiped off the indexes.

The US president said overnight on Monday that he did not want global markets to fall, but also that he was not concerned about the major sell-off, adding: “Sometimes you have to take medicine to fix something.”

Mr Trump, who spent the weekend in Florida playing golf, unveiled a range of tariffs on countries around the world last week, including a 10% “baseline” rate on all the US’s trading partners which came into effect on Saturday.

In a new research note, a group of analysts for Deutsche Bank said the “markets are still reeling from the announcement of US reciprocal tariffs last Wednesday, which has seen investors price in a growing probability of a US recession”.

“In fact, S&P 500 futures are currently down another 3.55% overnight, which, if realised, would see the index fall into bear market territory today, down more than 20% from its closing peak in mid-February,” the analysts warned.

“So the scale of the sell-off is now coming into line with some of the most aggressive drawdowns of the last decade.

“Looking to the week ahead, tariffs are clearly set to dominate the agenda, but the big question is also how other countries might retaliate.

“That’s something markets are watching for closely, as it was China’s retaliation that led to the fresh sell-off on Friday.”

China’s reciprocal 34% tariff on US exports to China are set to come into force on Thursday.