London’s blue-chips extended losses today after Asian markets took a battering on a dire month for US manufacturers and a slowdown in China.
The FTSE 100 — already down more than 4 per cent so far this year after a miserable January for equity investors — reeled again today after a dramatic 4 per cent overnight slide for the Nikkei.
The benchmark kicked off the morning by plunging about 30 points but then regained ground and was down 8.09 points at 6457.57. Japan’s benchmark index is now down 14 per cent on the year so far. Hong Kong’s Hang Seng fell nearly 3 per cent.
Sentiment has been shaken in recent weeks by signs of stress in emerging markets Turkey and Argentina, whose currencies have come under severe pressure as the US Federal Reserve rows back its money-printing programme.
China and the US — the world’s two biggest economies — added to the tension after the latest survey evidence revealed US manufacturers slowing virtually to stall-speed in January.
Although Arctic weather conditions are likely to have played a part, new orders dwindled at a pace not seen for more than 30 years, heralding more gloomy jobs data and spooking Wall Street.
The latest sell-off comes a little more than a fortnight after the FTSE 100 looked set to test all-time highs near 7000.
IG analyst Alastair McCaig said: “Sentiment is a bit more cautious at the moment.”