Kalkine: FTSE 100 Set to Open Lower Amid Tariff Concerns and Geopolitical Unrest

June 12, 2025 04:18 PM AEST | By Team Kalkine Media

Kalkine: FTSE 100 Set to Open Lower Amid Tariff Concerns and Geopolitical Unrest — Image source: Shutterstock

Global Tensions Pressure Sentiment

The optimism driven by a modest decline in US inflation figures lost momentum as geopolitical tensions intensified. Statements from the US president highlighted potential security concerns in the Middle East, with personnel relocations already underway. The situation has sparked fears of broader instability, particularly following stalling nuclear negotiations with Iran. Heightened speculation over potential strikes in the region has contributed to a shift away from risk-oriented positions.

Tariff Talk Overshadows Trade Progress

Despite early enthusiasm from news of a trade framework between the US and China, concerns over tariff implementation have overshadowed those developments. Although early US trading showed promise, major indices such as the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all ended the day lower. The sentiment turned negative following remarks that raised alarms over future tariff policies, which could complicate global trade flows and economic forecasts.

Asia Pacific Markets Reflect Uncertainty

Market movements in the Asia Pacific region followed the downbeat tone from Wall Street. In Japan, the Nikkei 225 edged lower during the afternoon session. Meanwhile, the Shanghai Composite showed marginal weakness, and the Hang Seng Index in Hong Kong declined more notably. The S&P/ASX 200 in Australia also closed slightly in the red. Overall, Asian equities mirrored the growing unease about both trade and regional security developments.

London Futures Indicate Lower Start

According to early indicators, the FTSE 100 is expected to open lower, reflecting the cautious tone across global markets. The small rise recorded in the previous session appears to be reversed, with futures pointing to a subdued start. This movement aligns with a broader pattern observed in global indices as market participants assess the evolving trade and geopolitical landscape.

Market Volatility Linked to External Pressures

The pullback in risk appetite is not attributed to domestic economic performance but rather to external global developments. These include heightened geopolitical friction and a lack of clarity on the future of international trade agreements. As uncertainty grows, major indices across different regions are demonstrating sensitivity to diplomatic statements and shifting international relations.

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