Global stocks tumble on Trump trade war threat

GLOBAL stocks tumbled yesterday as investors fretted over the risk of an all- out trade war between the US and China.

The FTSE 100 sunk 1.6pc, or 120.17 points, to 7260.47 after tough-talking American officials suggested they were set to press ahead with new tariffs on Friday.

It was despite some optimism on Monday about the decision by Chinese negotiators to go ahead with talks in Washington.

But last night concern about the breakdown in negotiations flared up again on Wall Street.

The Dow Jones fell 473.39 points, or 1.79pc, and the S&P

500 dropped 1.65pc. It came as the price of Brent Crude oil hit a five-week low of $69.93 per barrel and Europe’s Stoxx 600 index dipped 1.4pc.

Keith Parker, an analyst at UBS, told investors: ‘We still see a trade war as a low probability given the next tranche of tariffs would hit US consumer goods, but nevertheless it would have a big negative impact.’

Industrials groups, which are vulnerable to uncertainties in the global market that might affect manufacturing, slipped.

Melrose fell 5.8pc, or 11.7p, to 188.8p, while Ashtead slid 3.5pc, or 74p, to 2037p.

There was better news for travel operator Thomas Cook, which was flying high after Lufthansa’s boss said that he would bid for its German airline, Condor.

Shares in the British company rose 6.1pc, or 1.33p, to 23.01p as Lufthansa’s Carsten Spohr backed an offer, with an option to acquire Thomas Cook’s remaining airlines. This includes operations in Britain, Scandinavia and Spain.

Thomas Cook, which tumbled out of the FTSE 250 last year, put its profitable airlines up for sale in February after struggling under the weight of its £349m debt pile.

Just last week, the firm said it was in talks with banks to potentially increase its borrowing and ensure it had enough cash available over the quieter winter booking period for next year. Defence company Babcock

International, which has worked on every one of Britain’s nuclear submarines, dipped 2.6pc, or 13.8p, to 508p as major investor Blackrock revealed it had sold down its stake to below 5pc.

And while the number of businesses facing insolvency is on the rise, at least one firm is reaping the benefits. Restructuring firm

Begbies Traynor, which focuses on helping smaller companies, jumped 18.3pc, or 11p, to 71p as it said performance was strong in the three months ending April 30, the final quarter of its financial year. Results will be ‘comfortably ahead’ of market expectations. Copper miner Phoenix Global

Mining, which owns one of the only cobalt resources outside the Democratic Republic of Congo, sparked excitement among investors as it upgraded the amount of precious metals it expects to find in its Idaho mine.

Shareholders are hoping that the US-focused miner will soon prove popular among electric carmakers, who need cobalt and copper and may find it easier to buy the metal from the US. Shares rose 6.7pc, or 1p, to 16p.

Victoria, a rug supplier to the Queen, said profitability was improving after it invested heavily in ceramic tile production lines and opened warehouses. Shares edged up 3.7pc, or 19p, to 540p.

And inhaler- maker Vectura could breathe easier after it won a US patent claim against drugs giant Glaxosmithkline.

A jury found three GSK inhalers infringed Vectura patents, and awarded the smaller company £69m in damages. Vectura will also seek royalties from further sales of GSK’s infringing products.

Its shares climbed 12.5pc, or 9.05p, to 81.4p, while GSK slipped 2.2pc, or 34.4p, to 1517.8p.