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FTSE tumbles 4% into bear market as oil rout reignites

FTSE 100 enters bear market territory as oil price suffers another steep fall and IMF issues warning over global growth.

 
FTSE tumbles 4% into bear market as oil rout reignites

Update: The FTSE 100 has fallen by 4%, dropping firmly into bear market territory as the oil price suffered another steep fall.

The UK blue-chip index fell 235 points, or 4%, lower at 5,641 as a slump in US markets at the open sparked a renewed drop on the FTSE 100. That represents a fall of more than 20% from its intraday high of 7,123 set in April last year, placing the index in a technical bear market.

Only three FTSE 100 stock managed to avoid the sea of red, with Randgold Resources (RRS) the biggest riser, up 2.9% higher to £43.92 as investors fled to the safe haven of gold.

A fresh slump in the oil price weighed on the index, with the price of Brent crude dropping to $27.70 a barrel, down 3.7% on the day.

The falls came as the International Monetary Fund issued a stark warning over global growth, as it cut its forecast for the year to 3.4% from 3.6%.

'Risks to the global outlook remain tilted to the downside and relate to ongoing adjustments in the global economy: a generalised slowdown in emerging market economies, China’s rebalancing, lower commodity prices, and the gradual exit from extraordinarily accommodative monetary conditions in the United States,' it said.

'If these key challenges are not successfully managed, global growth could be derailed.'

Shares in Shell (RDSb) were hit hard, down 7.2% at £12.71, as the oil major also reported an expected 40% slide in profits in its fourth quarter. BP (BP) fell 4.9% to 326p and BG (BG) was down 3.9% at 903.6p.

Miners also suffered heavy losses, as metal prices fell as global growth fears took hold. BHP Billiton (BLT) dropped 8.7% to 572.5p, Glencore (GLEN) was down 7.6% at 75.6p and Anglo American (AAL) dropped 8.1% to 219.4p.

Financial stocks were big fallers. Insurer Prudential (PRU) slumped 5.8% to £13.11, financial advice group St James's Place (SJP) was down 6% at 870p and emerging markets-focused bank Standard Chartered (STAN) dropped 5.5% to 464.3p.

11 comments so far. Why not have your say?

Craig Ross

Jan 20, 2016 at 16:16

And all the small investors will sell, and they'll buy back when prices are high.

People are very, very strange. Look at the trades on Hargreaves Lansdown. Who are these people buying and selling less than a couple of hundred quids worth of shares? What on Earth do they think they're playing at?

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BANK@BULL

Jan 20, 2016 at 17:21

I TEND TO AGREE.

I WOULD BUY MORE BANKING SHARES IF I HAD THE MONEY.

I'M FULLY INVESTED BY THE END OF YEAR 2015.

BUT NOT IN THE FT 100.I'M MORE INTERESTED IN U.S.,EMERGING COUNTRIES & LOWER € PERIPHERAL COUNTIES.

GOOD-LUCK ALL

from

SUNNY M A L T A

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RBNF

Jan 20, 2016 at 17:56

No the small guys and the pension funds should remain in take a massive hit while the pros make all the money selling out now and buying back later.

I have a theory that all the very small sales are quants stoking the selling fire.

Anyone share that view ?

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JEL G

Jan 20, 2016 at 17:58

I'm down on paper over 150K but I been investing since 1966 and seen it all before.

Sit tight, I'd say, and go and enjoy your pint in the pub.

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Craig Ross

Jan 20, 2016 at 18:34

I'm down a good forty, but not since 1998!! Taking the long view I've been well rewarded for catching falling knives and holding on.

It isn't the serious players who're selling today, it's the highly-leveraged idiots who have no choices. Players are buying good companies at high yields and keen prices.

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Banjo via mobile

Jan 20, 2016 at 19:14

The hard thing is sitting tight when you see the total falling and deciding when to buy more. Tempted to buy Thursday but better wait a bit

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Drake

Jan 20, 2016 at 19:42

Each to his own. Tough to call small (not very well off) shareholders idiots. I sold down my equities to 20% a few months back and bought goldminers. Portfolio up since start of 2016.

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JEL G

Jan 21, 2016 at 18:52

Drake........ Aren't you a clever little man!

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Drake

Jan 22, 2016 at 12:24

Drake

Jan 22, 2016 at 12:42

On reflection, just prudent. And not so little.

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Craig Ross

Jan 22, 2016 at 12:43

Billions "wiped on" today, and all the traders are getting spanked on dealing costs, the spread and stamp duty.

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