FTSE and European counterparts fall in value as US tariffs hit car stocks

European equity markets finished in the red on Thursday as motor stocks were dragged by US President Donald Trump’s decision to slap a 25% import tax on cars.

London’s stock markets were relatively sheltered from the announcement, although Aston Martin dropped by 6.7% as its investors swallowed the potential impact on US sales.

The FTSE 100 reclaimed some ground during the session as traders digested trade policy implications, while gains from retailer Next also helped to offset negativity in other sectors.

London’s top index finished 23.47 points, or 0.27%, lower to end the day at 8,666.12.

Elsewhere in Europe, the German Dax was firmly lower as Volkswagen and other car manufacturers lost value.

The Cac 40 ended 0.51% lower for the day and the Dax index was down 0.77%.

“The trade war has escalated and, unsurprisingly, German carmakers are leading the declines or are among the biggest decliners today. We saw sharp drops in shares of Porsche, Mercedes and other carmakers such as BMW and VW,” Fawad Razaqzada, market analyst at City Index said.

In the US, the main stock indexes were lower as many of its own car manufacturers, such as Ford and General Motors, were affected by the White House tariffs plans.

However, the announcement helped support another rise for Tesla stock.

Meanwhile, sterling recovered ground on Thursday after lower-than-expected inflation data had weighed on the currency on Wednesday.

The pound was up 0.65% at 1.296 US dollars and was up 0.11% at 1.199 euros when London’s markets closed.

In company news, high street giant Next climbed in value on Thursday after it revealed an annual profit haul of more than £1 billion and raised its outlook for the year ahead.

The company said trading had been better than expected in the first eight weeks since its year-end, helping it to raise its guidance for 2025/26, pencilling in sales growth of 5% to £5.3 billion and profits up 5.4% to £1.07 billion.

Next shares rose by 10.5% to 11,035p at the close.

Naked Wines investors toasted the group’s new strategic plan after the online wine retailer set out efforts to return to sustainable profit growth.

The business said it has made “significant strides” in improving its financial position over the past 18 months and is on track to report £33 million in net cash for the year to March 31.

Shares in the company were up 29.8% at 81.8p on Thursday.

M&C Saatchi was slightly lower after the advertising firm reported that like-for-like revenues grew by 3.7% for the past year.

Shares dipped 1.5% to 166.5p despite bosses hailing a “successful year” for the firm.

The price of oil fell back slightly during the session after recovering on Wednesday to its strongest level this month.

A barrel of Brent crude oil was down by 0.1% to 73.12 dollars (£56.42) as markets were closing in London.

The biggest risers on the FTSE 100 were Next, up 1,049p to 11,035p, Marks & Spencer, up 11.6p to 348.3p, Compass Group, up 69p to 2,565p, AB Foods, up 37p to 1,945p, and Endeavour Mining, up 32p to 1,787p.

The biggest fallers on the FTSE 100 were Antofagasta, down 112.5p to 1,777.5p, M&G, down 12.1p to 205.6p, Taylor Wimpey, down 5p to 108.05p, Schroders, down 16p to 358.6p, and Segro, down 22.4p to 680.6p.