Risk aversion dominated markets on Monday as investors digested US President Donald Trump’s threat of sweeping tariffs on European nations over Greenland.
London stocks opened sharply lower but recovered through the morning, with the FTSE 100 down just 0.37% by 14:00 GMT. Europe fared worse, with France’s CAC 40 off 1.6% and Germany’s DAX 40 down 1.4%.
Trump warned on his Truth Social account that Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands, and Finland could face a 10% tariff on all US-bound goods from 1 February, rising to 25% on 1 June unless Greenland is sold to the US.
European leaders considered their response. French aides said President Emmanuel Macron might push the EU to use an anti-coercion tool to restrict imports from the US. The UK’s Prime Minister Keir Starmer urged resolution through calm dialogue rather than trade conflict or military posturing.
Investors sought safety in defensive sectors. Fresnillo (LON:FRES) led FTSE 100 risers with a 5.5% gain, while gold miner Endeavour Mining (LON:EDV) rose 2.3%. Defence stocks BAE Systems (LON:BA) and Babcock International (LON:BAB) advanced 1.3% and 1.2%, respectively.
On the downside, Diploma fell 3.7%, with Spirax Group, Diageo, and Burberry down 2.7%, 2.6%, and 2.4%.
WH Smith (LON:SMWH) jumped 8.7% on news it had appointed Leo Quinn, former Balfour Beatty CEO, as executive chair to navigate past a £30 million North America accounting error. Quinn takes over in April, while current Non-Executive Chair Annette Court departs at the February AGM. Interim chair Simon Emeny will hold the position until then.
Marshalls dipped 5.2% despite confirming Simon Bourne as permanent CEO. The landscaping products maker expects 2025 adjusted pretax profit of £43.6 million, down 16% from 2024, with revenue up 2.1% to £632 million. Cost-cutting measures should support a stronger 2026 performance despite continued market weakness.
On AIM, Thor Energy shares soared 21% following a £1.1 million cash payment from the sale of its Molyhil project in Australia to Tivan. Three further payments totalling £1.9 million are due between September 2026 and 2028, strengthening the company’s resources for its Hy-Range project.
US markets were closed for Martin Luther King Jr Day. Futures pointed to a lower open on Wall Street, with the Dow down 0.9%, the S&P 500 1.1% lower, and the Nasdaq 1.5% down. The cash market reopens on Tuesday.