BRITAIN’S top share index plunged yesterday to surrender almost all its remaining 2012 gains, led by falls in risk-sensitive miners, oils, and banking stocks after last Friday’s weak US jobs data undermined global economic expectations.
The FTSE 100 index closed down 128.12 points, or 2.2 per cent, at 5,595.55, its second biggest percentage fall of the year after dropping 2.3 per cent last Thursday.
The unease was also reflected in the FTSE 100 Volatility index, which leapt nearly 23.5 per cent.
“The FTSE has almost completely wiped out the gains so far this year ... 2012 is at risk of being a carbon copy of 2011 where equity markets began the year with a spring in their step before sentiment turned very bearish as the European sovereign debt crisis spiralled out of control,” said Angus Campbell, head of market analysis at Capital Spreads.
The UK blue chip index started 2012 at 5,572.28 and hit a closing peak of 5,974.54 on 14 March.
Miners knocked the most points off the blue chip index as the US jobs data, weaker copper import figures and higher inflation in China, the world's biggest metals consumer, fed investor doubts about demand.
India-focused Vedanta Resources was the biggest blue chip faller, shedding 6.5 per cent after posting a drop in full-year iron ore output.
Integrated oils were also lower after the Chinese data raised doubts about demand in that sector too.
Banks suffered from heightened worries about the global economy and euro zone debt risks.
Barclays was a big faller, down 5.9 per cent. In a shareholder rebellion over CEO Bob Diamond’s £18m pay package, more than 10 per cent of investors are set to vote against the bank's remuneration report at its annual meeting later this month.
Randgold Resources was the top of just five FTSE 100 gainers, adding 5.2 per cent on hopes for a political settlement in Mali after the resignation of the African country's president and as the gold miner confirmed its production target for the year.
Across Europe, markets fell in response to worrying figures coming out of the Eurozone.
Both Spanish and Italian yields spreads over German Bunds widening, extending their moves from last week when the US jobs numbers added to concerns about the global economic outlook. The rising risk premiums on Spanish and Italian debt reflect renewed worries about the ability of Italy and Spain, the Eurozone’s third and fourth biggest economies, to repay their loans.
The FTSEurofirst 300 index of top European shares finished 2.5 per cent down at 1,026.15 points, the lowest close since mid-January. It has fallen 7.5 per cent since hitting an eight-month high in March and is up just 2.5 per cent this year.
Europe’s debt problems prompted investors to sell out of banks, with the STOXX Europe 600 banking index down 4.2 per cent.
Miners were the second-biggest decliners, with the STOXX Europe 600 Basic Resources index falling 4.2 percent on concerns about a drop in demand for raw materials and as data showed China, the world’s top metals consumer, imported 4.6 per cent less copper in March.
And oil prices closed down below $120 a barrel in London after China, the world's second largest oil consumer, reported a decline in imports of crude oil in March, raising concerns about its oil demand and a slowdown in the Chinese economy.