FTSE 100 plunges again over China economy fears
- Credit: PA
Volatile stock market conditions took their toll again today as the FTSE 100 Index plunged after sharp gains in the previous session.
Early trading saw the index of the top 100 UK-listed companies slump more than 100 points to below 6,000, wiping more than £30 billion off their combined value.
The FTSE 100 had seen a ten-day run of declines - its longest losing streak since 2003 - come to an end on Tuesday, with sentiment boosted by an interest rate cut from China’s central bank.
It had fallen by 2.8% on Friday and 4.7% on Monday - the joint-worst session since the downturn in 2009 - on deepening fears over the health of the Chinese economy.
The following day saw a climb of 3.1%, with markets in Europe also up and Wall Street seeing a rally. But US sentiment drained away and by the time New York’s Dow Jones Industrial Average closed it had dropped sharply again.
This was compounded by another turbulent session on Asian markets overnight to send the FTSE more than 2%, or around 130 points lower, shortly after opening, before paring back some of the losses.
All but a couple of stocks were lower with mining giants such as Anglo American and Antofagasta - hard hit by China’s woes and their impact on commodity prices - again dominating the fallers’ board.
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Tony Cross, market analyst at Trustnet Direct, said: “It’s Wall Street’s slump ahead of last night’s close that appears to be setting the pace for the UK market and as is often the way after these excessive moves, this volatility appears likely to be with us for some time yet.
“As a result, London traders are once again staring at screens awash with red numbers.”
Global markets have been rocked in recent weeks by the slowdown in China, the world’s second biggest economy, and the depreciation of the yuan.
Chancellor George Osborne has said the volatility showed that “lots of risks”’ remained in the global economy and that Britain was “not immune to what goes on in the world”.
Recent falls have seen the FTSE 100 fall into “correction” territory, more than 10% off its all-time closing high of 7,104 in April.