THE FTSE 100 Index started the third quarter with further losses today as renewed fears over the global economy sent the top tier slumping to a near-10 month low.
Signs of slowing growth in the Chinese economy and further concerns over Europe’s sovereign debt crisis hit stocks hard, with banks and miners worse off.
The Footsie reached its lowest point since early September, down 44.6 points to 4872.3, having yesterday finished the second quarter down more than 13%.
Ratings agency Moody’s decision to put Spain on review of a possible downgrade prompted the latest sell-off, while data also showed China’s manufacturing slowed in June.
Japan’s Nikkei index slumped by more than 2% overnight while the Dow Jones Industrial Average on Wall Street ended 1% lower in the previous session and was on course for a lower opening again today, according to futures trading.
Investors waited cautiously for key US manufacturing data following the disappointing Chinese figures.
A closely watched gauge of UK manufacturing activity also sparked cause for concern that the bounce back on these shores was faltering due to a eurozone blow to exports.
The blue-chip fallers board featured a cross-section of stocks, with Barclays declining 7.4p to 263.2p, and Tesco - which holds its annual general meeting tomorrow - falling 9.9p to 370.2p.
Other fallers included commodity stocks, such as Essar Energy down 10.7p to 464.5p and Petrofac off 24p to 1162p.
BP continued to gain ground amid speculation of takeover interest from Exxon Mobil and hopes that Russian partner TNK-BP may snap up some of its assets to help free up cash to cover its soaring Gulf of Mexico liabilities.
Shares in the battered blue chip added 6.9p to 325.8p, a gain of 2%.
One of the few gains of the session in the FTSE 250 Index came from Tate & Lyle after the industrial giant took the historic decision to sell its European sugar refining business, including its Golden Syrup factory in London, to American Sugar Refining for £211 million.
With Tate now able to focus on higher margin businesses such as supplying sweeteners, starches and ethanol, shares rose 11.9p to 461.6p.
Department store chain Debenhams was also higher, up 2.95p to 55.95p, despite reporting a 0.4% drop in like-for-like sales in the 42 weeks to June 19. Analysts said stronger margins and quicker than expected progress on a debt refinancing deal were behind the share price improvement.
