The FTSE 100 has dropped to its lowest level since January, as mining company Glencore plummeted and China worries weighed on the market.
The index closed at 6,403 yesterday, marking the lowest close since January 14, when it ended the day at 6,388.
Commodities continued to drag the market down, with a number of energy and mining companies seeing sharp drops.
Glencore in particular was unable to convince investors it could endure the commodities slowdown after releasing a disappointing set of results, leading to an 8 per cent drop in the share price.
It was joined by other mining firms BHP Billiton, Rio Tinto and Anglo American, which all saw falls.
The commodity drops are in part prompted by concerns over the fallout from a China slowdown and devaluation of the country’s currency.
“Markets are looking east and don’t like what they are seeing. Slowing economic growth, currency devaluation and stock market mayhem in China have hit commodities and mining stocks, and with them the UK stockmarket,” says Laith Khalaf, senior analyst at Hargreaves Lansdown.
“The fate of Footsie is of course deeply entwined with that of the oil and mining companies, which together make up around of a fifth of our benchmark index,” he says.
Oil and mining stocks aside, the FTSE has performed well so far this year, highlighted Khalaf. With oil and mining stocks stripped out the market has returned 4.8 per cent with dividends reinvested, compared to 0.5 per cent including the companies.
However, news of the confirmation of a Greek bailout failed to boost markets yesterday. It’s a stark turnaround from last month, when Greek worries led the FTSE to the largest monthly fall in three years.