A weak start for London shares turned into a full-blown rout today after investors ditched risky stocks on more global growth fears.
The FTSE 100 Index finished more than 2% lower, off 123.35 points at 5,366.8, after overnight disappointment at the US Federal Reserve’s failure to signal more stimulus measures fuelled a wider concern about the recovery.
Commodity stocks were the biggest casualties, with oil prices also sharply lower on weekly figures showing weaker demand at US refineries. Market heavyweight BP was 2% down or 11.3p lower at 440.95p and Royal Dutch Shell fell 57.5p to 2,330.5p.
Lloyds Banking Group was the best performing banking stock after announcing Antonio Horta-Osorio would return as chief executive on January 9, helping to limit the fall in shares to 0.65p at 24.1p.
Fashion group Next held firm after its Spanish rival Inditex, which trades as Zara and Massimo Dutti in the UK, reported 11% sales growth between November 1 and last weekend.
With the figures pointing to resilient demand in the fast-fashion sector, Next shares were higher for much of the session before finishing 5p lower at £25.85.
In the FTSE 250 Index, Thomas Cook was lower after it revealed profits in its troubled UK business fell 68% to £34.1million. Shares were 0.3p lower at 14.5p.
The only FTSE 100 Index riser was Morrisons, up 0.8p at 316.9p
The biggest FTSE 100 fallers were Fresnillo down 187p at £14.94, Essar Energy off 13.5p at 193.1p, Randgold Resources down 410p at £63.60 and Eurasian Natural Resources off 36.5p at 611p.
Alan Cockburn, of investment manager and financial planning specialist Brewin Dolphin in Aberdeen, highlighted that Xcite Energy surged ahead by 7.62%, to 87.625p. Elsewhere, AG Barr climbed 4.74% to close at £12.13.
Amongst the fallers, Aberdeen Asset Management fell 5.64% to 197.4p. Royal Bank of Scotland also finished the day in negative territory, losing 4.41% at 19.5p, while Cairn Energy decreased by 2.54% to end at 268.9p.