TUESDAY MARKET CLOSE : Germany woes drag markets down

Markets veered into the red today amid grim economic data from Europe’s biggest economy and fears over the spread of the deadly Ebola virus.

The FTSE 100 Index had initially been cushioned by the positive impact on mining stocks of the suggestion of a possible merger between Glencore and Rio Tinto, but this faded as Glencore said it was no longer actively considering an offer.

At the close the top-flight was down just over 1 per cent, or 68.07 points, at 6,495.58.

Germany’s Dax and France’s Cac 40 suffered steeper declines.

Markets were dragged down by a shock 4 per cent slide in German industrial production in August – the biggest fall since the financial crisis.

The weak industrial output figures meant the pound rose against the single currency to stand at just above 1.27 euros, although official data from the UK’s own manufacturing sector suggested it was also feeling the impact of eurozone weakness with factory output rising just 0.1 per cent on the previous month.

The disclosure that a Spanish nurse had contracted Ebola, in the first known transmission of the disease outside west Africa, hit travel stocks.

International Airlines Group – which owns British Airways as well as Spain’s Iberia and Vueling – tumbled by 7 per cent, or 25.7p, to 345.6p.

Low-cost rival EasyJet was not far behind with a fall of 5 per cent, or 78p, to 1,389p, while cruise ship operator Carnival also dipped 7 per cent, or 167p, to 2,328p and Tui Travel was off 15.3p at 382p. Outside the top flight, Thomas Cook fell 6.4p to 112.6p. The biggest risers on the FTSE 100 included Tesco up 5.8p at 182.6p, Anglo American up 27p at 1,375p and Royal Mail up 3.5p at 395.6p.