BRITAIN’S top share index hit a near 10-month closing low yesterday, led down by mining stocks and banks, as risk appetite was hurt by renewed concerns over the strength of global recovery and Europe’s debt problems.
The FTSE 100 closed down 157.46 points, or 3.1 per cent, at 4,914.22, its lowest close since 4 ?September 2009, and its biggest one-day percentage fall since May 14, 2010.
There was not a single FTSE 100 riser.
Miners dominated the blue chip fallers’ list, pressured by weak base metal prices, and with traders pointing to fears about potential soft growth in the Chinese economy. Rio Tinto and Xstrata were the worst off, down 6.4 per cent and 6.1 per cent respectively.
A leading indicator for the Chinese economy was revised to show a much smaller rise than previously published, and was cited by some traders as having an impact, even though the data is not usually closely watched.
“Today is a Chinese story, and we’ve also had some very, very weak consumer confidence figures from the US. It doesn’t bode well for the non-farm payrolls on Friday,” said Angus Campbell, head of sales at Capital Spreads.
US consumer confidence dropped sharply in June after rising for three months on worries about the labor market, according to a report from the Conference Board.
And jitters mounted ahead of bank repayments to the European Central Bank this week.
Banks must repay €442bn to the European Central Bank on Thursday, leaving a potential liquidity shortfall in the financial system of over €100bn.
These concerns over governments’ moves to try and solve the debt problems by cutting
government spending boosted the dollar and added to the pressure on metals prices ahead of what are expected to be weak US non-farm payrolls later this week.
Banks were lower as concerns about debt exposure returned. Barclays shed 6.3 per cent, while sector heavyweight HSBC fell 3.7 per cent.
Energy stocks dragged the index as crude prices fell below $76 per barrel.