A SLUMP of 2.5 per cent in the FTSE 100 left blue-chip investors nursing losses of more than £112 billion following a disastrous week for global markets.
The worst week for London’s top flight since August 2011, with shares down by 6.6 per cent since Monday morning, reflected the tumbling price of oil and renewed jitters over the strength of the global economic recovery.
The FTSE 100 Index fell 161.07 points on Friday alone to 6,300.63 after the price of Brent crude set a new five-and-a-half year low of $62 a barrel.
Laith Khalaf, senior analyst at Hargreaves Lansdown, said markets were unsure whether a lower oil price was a symptom or a cure for weak global demand.
“The answer is it is probably both, but the restorative qualities of a lower oil price are going to take some time to feed through, and in the meantime markets are focusing on the negatives,” he said. “But there are reasons to be positive. This is effectively a huge stimulus package of $4bn a day, delivered directly into the pockets of oil consumers.”
Despite that, the sell-off also covered the retail sector – which should be a beneficiary – as Next dropped 160p to 6,385p and Dixons Carphone slipped 14.3p to 421.6p.
Oilfield services firm Petrofac slid by more than 6 per cent to 678p, while BP and Shell were down by around 3 per cent at 385.65p and 1,984p respectively.
Mining stocks were also weakened as China reported falling growth in industrial output. BHP Billiton was off 36p at 1,325p and Rio Tinto fell 65.5p to 2,682.5p.
Incongruously, oil and mining industry supplier Weir Group was one of just four blue-chip risers, after a note from Canaccord Genuity upgraded the stock to “buy” on valuation grounds following its recent steep decline. Shares added 4p to 1,699p.