FRIDAY MARKET CLOSE: Wave of risks batters global markets

The Footsie fell sharply as a series of political and economic events triggered a correction for world markets.

A debt default for Argentina, and the West’s sanctions against Russia were among factors that drove the FTSE 100 down by as much as 100 points early in the session. The index recovered some poise later to close 50.93 points lower at 6,679.18.

David Madden, market analyst at IG, said: “Disappointing manufacturing numbers for China could not have come at a worse time. Traders were already gripped by fear because of the sanctions against Russia; natural resource stocks had a great run in July and this was the excuse to jump ship.”

Rio Tinto was down 37.5p to 3,354.5p and commodities giant Glencore was 3.9p lower at 356.2p. Water company United Utilities was the biggest faller in the top flight, off 34p to 856p after broker Credit Suisse cut its rating on the stock to “underperform”. Rival Severn Trent dropped 58p to 1,877p.

The same broker also cut outsourcing group Capita to “neutral” from “outperform”, causing shares to fall almost 2 per cent or 22p to 1,180p.

A shortened risers’ board was led by medical devices firm Smith & Nephew as it stuck by its outlook for the year, even though its advanced wound management business is set to grow by less than the market. Shares rose almost 4 per cent or 39p to 1,065p.

International Airlines Group also rose after its half-year figures soothed investor nerves in the wake of profit warnings from Lufthansa and Air France-KLM. Its shares soared 7.4p to 338.2p.

In the FTSE 250, Direct Line climbed 5 per cent or 14.4p to 299.4p after it announced a special interim dividend of 10p a share alongside better-than-expected first-half figures.