Market Report: No sign of the fabled Santa Rally that traditionally lifts stocks in December

Yesterday’s crash came as the Chinese yuan dropped to a four-and-a-half year low

Traders were starting to wonder whether Father Christmas exists this week, with no sign of the fabled Santa Rally that traditionally lifts stocks in December.

The FTSE 100 made it seven consecutive days of losses, finishing with a 135.27-point or 2.2 per cent slump to 5,952.78.

Yesterday’s crash came as the Chinese yuan dropped to a four-and-a-half year low against the dollar, sparking concerns over the effect on the global economy, given China’s status as an import powerhouse. That hammered industrial mining stocks, including Anglo American, which plunged 25.7p to 292.95p.

The miner, which unveiled a raft of cost-cutting measures including suspending the dividend, has lost more than a fifth of its value this week. That was exacerbated yesterday when ratings agency Fitch cuts its credit rating to BBB- from BBB, warning that the challenges it faced were “worse than we had previously forecast”.

Iron ore futures hit a record low in China, which hurt Anglo-Aussie giants BHP Billiton, down 39p to 694.2p, and Rio Tinto, 85.5p cheaper at 1,885.5p.

Not to be outdone, the oil price fell $2.23 to a seven-year low of $37.50 after the International Energy Agency warned of a global glut until the end of next year. The soon to be merged energy duo Shell and BG Group slipped 73.5p to 1,460p and 49.8p to 925.8p respectively.

Economic uncertainty in South Africa after President Zuma fired his finance minister caused Old Mutual to crash 18.5p to 155.7p and fellow Anglo-African financial group Investec to dip 50.9p to 419p.

The sell-off at Apple supplier Imagination Technologies escalated as it dropped 15p to 170p, while International Personal Finance slumped 26.5p to 296p as the loan provider admitted it faces a material hit in Slovakia, which is outlawing the use of cash when delivering credit.

On AIM, the trading firm Plus500 rose 17.75p to 431.75p as it said it will resume taking on new customers in January – just days after broker Numis suspended coverage citing a string of concerns including regulatory risk after the gambling software firm Playtech called off its £460m takeover of Plus500.