The FTSE 100 Index (INDEXFTSE: UKX) dropped for the second successive session on Thursday, with the market reacting to US auto tariffs. The Index traded at 8,638 points, down by 0.49%. Nine of the top ten companies by market cap were in loss at the time of writing, with BAT at -1.97% and Rolls Royce down by 1.35%.
US President Donald Trump announced a 25% tariff on car imports on Wednesday, exacerbating fears that the trade tariff war could be here for long. The UK exported £6.4 billion worth of vehicles to the US in 2023; the second-largest market for UK manufacturers.
Therefore, a harsh tariff environment could exacerbate the pressure on the industry that has experienced successive monthly production decline for the past twelve months according to data from Society of Motor Manufacturers and Traders.
Elsewhere, UK Finance Secretary Rachel Reeves warned on Wednesday that a tariff hike against UK could drive the government to raise taxes- a move that could impede the economic growth plans.
Meanwhile, the pound sterling has been strengthening against the US dollar in the last month, with the GBPUSD pair up by 2.5% in the last month and at +3.4% year-to-date. That adds pressure on the FTSE 100 Index by making UK exports more expensive. The point is up against the dollar by 0.4% as of this writing, and a continuation of the trend will limit gains by the Index.
FTSE 100 Index Prediction
The FTSE 100 Index pivot mark is at 8,655 points and resistance at that level favours the sellers to stay in control. The index will likely decline and find its first support at 8,615 points. However, an extended downward momentum will take the Index lower to attempt breaking 8,566 support.
Conversely, going above 8,655 points will shift the momentum to the upside. In that case, the Index will likely meet the first resistance at 8,697. Breaking above that level will invalidate the downside narrative and potentially test 8,732 points in extension.
The post FTSE 100 Index Dow Again As Top Stocks Lead Decline appeared first in UK on InvestingCube.