Still plunging oil prices and further worrying news from the eurozone ensured markets started the first full business week of the year with a bloodbath.
London’s commodity firms bore the brunt as the FTSE 100 slumped 2 per cent, while other European indices were hit by confirmation that Greece will go to the polls and data from Germany suggesting it is dangerously close to deflation.
The Footsie dropped 130.64 points to 6,417.16, with its French and German counterparts falling even further.
Tony Cross, market analyst at Trustnet Direct, said: “Brent crude is down below $54 a barrel, but arguably what’s really rattling traders is the fact the US crude contracts are set to fall below the psychologically significant $50 level, moving producers into territory where it’s going to be increasingly difficult for many wells to turn a profit.”
Weir Group was the worst hit, down more than 6 per cent at the prospect of customers in relatively high-cost extraction areas such as shale oil slashing their investment in new projects. Shares in the Glasgow-based firm slipped 119p to 1,764p.
Among the oil majors, BP was down 5 per cent or 20.75p at 389.7p and Shell fell 4.8 per cent or 107p to 2,128.5p. The miners fared little better, with Anglo American and Glencore both down by almost 5 per cent at 1,126.5p and 282.5p respectively.
The exception was Randgold Resources, which benefited from a jump in precious metals prices as traders looked for safe havens. It topped the blue chip risers’ board as its shares added 123p to 4,536p.
It was joined on the up by the usual beneficiaries of lower fuel prices. Cruise ship company Carnival added 50p at 2,980p, while airline groups IAG and EasyJet were also flying higher.
EasyJet was up 20p at 1,703p, while British Airways parent IAG lifted 6.5p to 493.5p.