Global markets sink as President Trump's Mexico tax tariffs put traders into a spin

Ugly scenes across the City’s trading floors today as blue-chip stocks sunk into the red amid signs the global economy is heading for a steep slowdown.

Fresh Trump tariffs on Mexico and some filthy Chinese manufacturing numbers, showing the sector is in contraction, sent markets into a spin as the world hurtles towards a full-scale trade war.

Miners were hardest hit, with Antofagasta losing 20p to 1041p and Rio Tinto dropping 83.5p to 4562p. Financial stocks were also on the slide. Royal Bank of Scotland lost 4p to 213p and Standard Life Aberdeen was off 5.1p to 267p.

Oilers lost ground too, with BP falling 1.8p to 539p and Shell down 13.5p to 2454p as Brent crude slid over 1% to $64.66 per barrel.

The heavy losses across the board saw the FTSE 100 drop 62.53 points to 7155.70, meaning the index lost 3.5% in May, its worst monthly performance this year.

Analyst Neil Wilson at Markets.com said: “The worry is who’s next on Trump’s list. The EU may be next. Coming at a time of a breakdown in talks with China, it’s another blow.”

There were some gainers as investors headed for safe-haven assets and as a result utilities firm SSE rose 12p to 1061p and United Utilities added 4.8p to 788p.

But the bond market saw the most action, with investors taking their money out of equities and putting it into government debt markets.

The German 10-year bund yield fell as much as 1.6 basis points to minus 0.192%. The yield, which moves in the opposite direction to the price, now sits at the lowest level on records. Other havens such as gold also made gains. Further down the market Rainbow Rare Earths rose for a third straight session in what may be a rare winner from the global tariffs war. China said this week it would slap tariffs on niche metals that are used in electronics.

The threat would hit US companies dependent on rare earth minerals hard. They will now have to find other sources for their rare earths. The shares were up 11%, or 0.5p, to 5.1p.