Global stock markets slump as US data shows economic activity cooling

London’s FTSE 100 closed 39.19 points lower, or 0.51%, to 7,682.33.

Top global stock markets have slumped on Tuesday (Kirsty O’Connor/PA) (PA Archive)

Top global stock markets slumped on Wednesday as fresh data from the US showed economic activity continues to slow under the weight of higher interest rates.

London’s FTSE 100 was firmly in the red, with miners and industrial stocks among the day’s biggest fallers.

At the end of the day, it closed 39.19 points lower, or 0.51%, to 7,682.33.

Major European indices suffered a worse day of trading, with Germany’s Dax tumbling 1.38% and France’s Cac down 1.58%.

Over in the US, the S&P 500 was down about 0.7% and Dow Jones down 0.6% by the time European markets closed.

Traders were in lower spirits amid new figures from the US showing that the manufacturing industry contracted last month for the 14th month in a row.

It comes ahead of the Federal Reserve’s December minutes being released on Tuesday evening, which investors will be paying attention to for any further clues on whether policymakers will cut interest rates this year.

Craig Erlam, senior market analyst for OANDA, said: “Stock markets are spending a second day in the red, continuing the softer start to the year as traders await minutes from the December FOMC (Federal Open Market Committee) meeting.

“Given the remarkable end to 2023, it’s not particularly surprising that we’re seeing a little profit-taking at this stage.

“A lot has been priced in and we’re awaiting some big figures on the US labour market later in the week.”

The pound was up by 0.2% against the US dollar to 1.264, and up by 0.5% against the euro to 1.159.

The price of Brent crude oil surged by 2.8% to 78 US dollars per barrel.

In company news, shares in Ryanair dipped after the airline said it is likely to be impacted by the decision of some online travel agents to remove its flights from their websites.

Ryanair said the move was unlikely to “materially” affect its finances but cautioned that its load factor, which measures how well seats are filled on planes, could be impacted by 1% or 2% in December and January as a result.

Shares in the Irish business were down by 4.5% at the end of the day.

Ladbrokes owner Entain revealed it has appointed the head of one of its activist investors to its board, raising expectations that the gambling giant could change some of its practices.

New non-executive director Ricky Sandler had previously criticised the firm for selling new shares in order to raise money for takeovers. Shares in Entain closed 0.5% lower.

The biggest risers on the FTSE 100 were Centrica, up 4.45p to 145.75p, GSK, up 40.6p to 1520.4p, Marks & Spencer, up 6.5p to 282.5p, BAE Systems, up 18p to 1134p, and Tesco, up 4.7p to 297.8p.

The biggest fallers on the FTSE 100 were Anglo American, down 99.2p to 1,869p, Rentokil, down 21.4p to 411.1p, Pershing Square, down 142p to 3,426p, Spirax-Sarco, down 369p to 9,846p, and Antofagasta, down 59p to 1,592.5p.