AAM downgraded on volatility fears

Shares in Aberdeen Asset Management dived almost 8 per cent yesterday amid concerns that volatile world markets have damaged its investments.

The Scottish wealth manager is more geared than most to Asian and emerging markets, which have suffered even more than the Footsie in recent sell-offs. Aberdeen was down 31.5p at 368.5p as broker Goldman Sachs took it off its “buy” list.

It came as traders reacted to the latest guidance from the US Federal Reserve, sending the FTSE 100 index down 189.31 points or 3 per cent to 6,159.51. Not a single one of Britain’s top 100 stocks ended the day in the black.

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Michael Hewson, senior analyst at CMC Markets, said: “The sell-off was given added momentum by rising concerns of a credit crunch in China as well as a simply horrible manufacturing purchasing managers’ index, as concerns about the trajectory of Chinese growth continued to build up.”

The dire Chinese manufacturers’ survey put extra pressure on London’s heavily-weighted miners. BHP Billiton and Glencore Xstrata were each down nearly 5 per cent at 1,728.5p and 292.7p respectively. Precious metals miners fared even worse, as expectations that the US Federal Reserve will taper its bond-buying sent gold and silver prices plunging. With the yellow metal falling to levels not seen since late 2010, Randgold Resources slumped 7.5 per cent at 4,296p. Polymetal International was the biggest blue-chip faller, down 12 per cent at 541p.

Royal Bank of Scotland was down 5 per cent at 303.7p amid talk of splitting the company in two. And confirmation that the regulator would require several banks to boost their balance sheets sent Barclays down 13.4p to 288.1p, a drop of 4.4 per cent.

NEW YORK: US stocks tumbled last night as investors reacted to the Federal Reserve’s plan to begin winding down its stimulus programme later this year if economic conditions permit.

The Dow Jones industrial average fell 352.03 points or 2.33 per cent, to close at 14,760.16 while the broader Standard & Poor’s 500 index lost 40.58 points or 2.49 per cent, ending at 1,588.35 and the Nasdaq Composite dropped 78.57 points or 2.28 per cent, finishing on 3,364.64.