Chinese crunch fears fuel FTSE rout

Fears of a slowdown and possible credit crunch in China inflicted a new round of losses on Britain’s top share index yesterday, taking it back to levels last seen at the start of the year.

The FTSE 100, already more than 10 per cent below its high just over a month ago, slipped 87.07 points or 1.4 per cent to 6,029.1. Other European bourses also suffered sharp declines.

William Nicholls, a dealer at Capital Spreads, said: “The markets, particularly the FTSE, have had a rough time, now down 12 per cent from last month’s highs, but the latest blow has come from Chinese data, which is continuing to disappoint. As the world’s largest metals consumer, the impact of this hits the mining companies severely.”

Commodity stocks littered the fallers’ board, with Vedanta Resources down 71p or 6.5 per cent at 1,026p and Glencore Xstrata 13.5p lower at 273.45p.

Financials were also under pressure, with Aberdeen Asset Management falling 4 per cent to 348.9p on the premise that current conditions could prompt clients to pull out of investments.

As traders looked for safety and analysts pointed to the dividend yields available at current prices, the listed utilities found some favour. A 1 per cent gain took United Utilities to the top of the risers’ board, up 6.5p to 655.5p, and Severn Trent was not far behind, trickling up 14p to 1,628p. Temporary power provider Aggreko was 14p stronger to 1,643p.

In the second tier, Dixons Retail was on of the biggest fallers with a decline of 11 per cent after Societe Generale downgraded its sterling bonds to “hold”. The PC World and Currys owner posted strong results last week and shares have more than doubled in the past year but were down by 4.72p to 38.1p yesterday.

NEW YORK: US stocks steadied last night as the bond market stabilised, but were still down on concerns about the Federal Reserve’s plans to reduce its monetary stimulus and on overnight losses in Chinese equity markets.

The Dow Jones industrial average closed down 139.61 points, or 0.94 per cent, at 14,659.79 while the Standard & Poor’s 500 Index ended down 19.32 points, or 1.21 per cent, at 1,573.11. The Nasdaq Composite Index was down 36.49 points, or 1.09 per cent, closing at 3,320.76.