Stocks slump on tariff news

European markets to open sharply lower

It looks to be a grim morning for European investors as stocks across the continent join in the general market rout. We can expect investors to sell first and ask questions later, and the urge to book profits and take cover is likely to be overwhelming.

Hiding places are likely to be few and far between, and for the moment it looks like the dollar is the only winner.

Trade war nightmare comes to pass

The weekend's news certainly puts paid to the idea that tariffs would just be a negotiating tool. Canada has already responded, and we can expect Mexico and China to take action too. The outlook for global equities just got much gloomier.

Over the next few days, we will probably see some sectors begin to recover slightly, most obviously those where export exposure to the US is lower than others. The cost of doing business with the world's largest and strongest economy is only likely to go up from here, taking down margins with it.

Cheaper valuations in Europe might mean that indices manage to stabilise earlier than in the US, but that will be little comfort to investors in coming days.