LONDON, Oct 3 ― London's FTSE 100 index endured its worst day since January 2016 yesterday as an overhang from weak US manufacturing data rekindled global growth worries and cast a shadow over markets, while investors scrambled for more clarity as Brexit looms.
The FTSE 100 plunged 3.2 per cent to its lowest level in more than a month and the domestically-focused FTSE 250 dropped just shy of 2 per cent, close to a one-month low.
Losses were seen across the board on both indexes as investors grappled with a deepening Brexit crisis and fears of a global slowdown amid heightened transatlantic trade tensions, while weak US private payrolls data also added to those fears.
“The declines now appear to be accelerating on rising concern that the ongoing deterioration in the manufacturing numbers will at some point start to manifest itself in the much larger services sector,” CMC Markets analyst Michael Hewson said.
At home, Prime Minister Boris Johnson tabled a “final Brexit offer” to the European Union and warned that unless the bloc compromised, Britain would leave without a deal at the end of this month.
“The prospect of a no-deal Brexit is weighing on financial stocks, as the Bank of England is likely to cut rates should that occur,” CMC Markets analyst David Madden said, adding that banks' margins could be squeezed in that scenario.
HSBC, which has also been weakened by the Hong Kong protests, fell 2.7 per cent. The global bank dragged on the blue-chip index along with oil majors BP and Shell, which tracked losses in crude prices.
Souring the already fear-stricken mood, the World Trade Organization authorised the US to apply tariffs worth US$7.5 billion (RM31.4 billion) annually on the European Union, including the UK, over illegal EU subsidies handed to Airbus.
In a sea of red, the only green shoot was Flutter Entertainment, which jumped 7 per cent after agreeing to an all-share deal with Poker Stars owner. Shares of mid-cap rival William Hill added 3.6 per cent on the M&A news.
Tesco, Britain's No. 1 retailer, ended marginally higher after rising as much as 2.3 per cent on better-than-expected earnings. Shares had opened lower after the surprise resignation of its Chief Executive Officer Dave Lewis.
“He will certainly be a hard act to follow, given that under his guidance he pulled Tesco back from the precipice,” Hewson said.
Another notable mover was Metro Bank that surged 26.7 per cent on its best day ever after the troubled lender successfully relaunched a bond deal. It had also separately announced the exit of its chairman and founder Vernon Hill. ― Reuters
