Leading shares ended another bad week at their lowest level since 29 September, as oil slumped again, commodity companies fell on continuing concerns about a slowdown in China, and investors remained nervous ahead of a possible US interest rate hike next week.
On top of that, companies with South African connections were also under pressure after the surprise departure of the country’s finance minister earlier in the week, which helped send the rand sharply lower.
The FTSE 100 finished at 5952.78, down 135.27 points or 2.22% on the day and 4.6% on the week. The weekly decline is the worst performance since August, and has seen £73bn wiped off the value of Britain’s top companies since Monday. The index has now lost ground for seven trading days.
Falling because of their South African connections were Old Mutual, down 18.5p or nearly 11% to 155.7p, paper and packaging group Mondi, 41p lower at £12.75, and among the mid-caps, Investec, off 50.9p at 419p.
Among the miners Anglo American fell 25.7p to 292.95p after this week’s badly received restructuring, including a decision to halt its dividend. Analysts are concerned other mining companies could follow suit and slash their payouts to shareholders.
Despite a revival in copper and zinc, iron ore continued to decline and undermined the whole sector. Meanwhile worries about a slowdown in Chinese growth - which saw the country’s currency fall back again - also dented sentiment. So BHP Billiton dropped 39p to 694.2p and Rio Tinto lost 85.5p to 1885.5p.
With the oil price plunging to a seven year low as the International Energy Agency forecast oversupply until at least the end of next year, energy companies were also big losers. BG fell 49.8p to 925.8p and Royal Dutch Shell B shares dropped 73.5p to £14.60.
US retail sales came in stronger than expected, reinforcing the belief that the US Federal Reserve will raise interest rates next week.
