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FTSE dives as investors dump shares and flee to gold

FTSE 100 falls more than 150 points in broad-based sell-off, while gold price jumps in flight to safety.

 
FTSE dives as investors dump shares and flee to gold

Update: The FTSE 100 has taken a dive in a broad-based sell-off, while the price of gold jumped as investors fled to perceived safe havens amid the volatility.

The UK blue-chip index fell 159 points, or 2.7%, to 5,689, with few sectors escaping losses. 'Significant price levels were being broken across multiple asset classes on Monday as signs of stress saw risky assets plummet and havens jump,' said Jasper Lawler, market analyst at CMC Markets UK.

Financial stocks were among the worst hit. Payments processor Worldpay (WPG) dropped 8.7% to 275.6p while online stockbroker Hargreaves Lansdown (HRGV) tumbled 7.6% to £11.27. Technology stocks were also hurt, with chip maker ARM (ARM) down 6.4% at 920p.

The sell-off also spread to house builder stocks. Berkeley (BKGH) dropped 7.7% to £31.29, Taylor Wimpey (TW) was down 6.8% at 170.3p and Barratt Developments (BDEV) fell 6.5% to 550p.

Among the few stocks to escape losses on the FTSE 100 were precious metals miners, as the gold price jumped around 2.6% to $1,193.66 an ounce. Randgold Resources (RRS) rose 13.2% to £60.00 while Fresnillo (FRES) was up 7.8% at 849.5p after a similar rise in the price of silver.

The broader mining sector meanwhile held onto gains from a rally which kicked off last week. Glencore (GLEN) was up 3.7% at 106p, Rio Tinto (RIO) rose 1.2% to £18.40 and Anglo American (AAL) added 2.1% to 370.9p.

Technology shares lead sell-off

(10:14) The FTSE 100 has tumbled, hit hard by a sell-off in technology, financial and industrial shares as investor fears over global growth reignited.

The UK blue-chip index dropped 110 points, or 1.9%, to 5,736, as fresh data showed that confidence among UK business had fallen to a three-year low.

Technology shares were hit hardest by the sell-off, with chip maker ARM (ARM) the biggest faller on the index, down 5.4% at 929.5p, in the ongoing fallout from main customer Apple's (AAPL.O) warning last week that sales of iPhones would start to fall this year.

Small cap rival Imagination Technologies (IMG) meanwhile dropped 4.6% to 125.8p after warning it would make a loss this year, blaming a slowing market and uncertainty over China.

The sell-off in technology shares also hit the Allianz Technology (ATT ) investment trust, which fell 4.2% to 546.6p.

Financial stocks were also badly hit, with online stockbroker Hargreaves Lansdown (HRGV) down 4.1% to £11.70, London Stock Exchange (LSE) dropping 3.8% to 440.4p and HSBC (HSBA) down 3.8% at 440.4p.

Rolls-Royce (RR) meanwhile dropped 3.9% to 509p on fears the aeroplane engine manufacturer would announce a dividend cut in results due on Friday.

'Share price thrusters in reverse at Rolls-Royce this morning on news management is set to meet Thursday to discuss the extent of its first dividend cut in more than 20 years,' said Mike van Dulken, head of research at Accendo Markets.

'The possibility of a cut to income is a major theme among corporates as they deal with margin pressure amid a tough economic environment and while Rolls-Royce's yield is far from the high single digits at risk among commodity-focused names, it highlights how bad things have got (as if five profit warnings in less than two years wasn't bad enough).'

Among the few FTSE 100 stocks to make gains were precious metals miners, as investors flew to the safe havens of gold and silver. Randgold Resources (RRS) was up 2.6% at £54.40 and Fresnillo (FRES) rose 1.2% to 797.5p.

2 comments so far. Why not have your say?

Martyn

Feb 08, 2016 at 12:09

Strange - according to the volume graph Randgold trading does not look exceptional. Although actual purchases are not quoted but does it mean the markets think we ought to be buying precious metals or are purchases dramatically increased?

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Desmond Grocott

Feb 08, 2016 at 19:09

People who panic ought not to buy shares. Panic and you lose money. Sit back and wait for the storm to blow over is the best advice.

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