The FTSE 100 fell 3.6% on Wednesday (29 January), losing £58bn ($82bn) as oil prices continue to dive. With WTI trading at $28 (£19) a barrel, commodity miners and traders weighed down stock markets across the world.
The bluechip entered bear market, meaning it has plunged 20% in just a few months. Since April 2015, when the Footsie was higher than 7,100 points, it has lost around a fifth, trading below 5,700 in 2016, its lowest point since October 2014.
Commodity giant BHP Billiton announced on Wednesday it cut annual iron ore production guidance by 4% to 237m tons after it was forced to halt operations at its Samarco joint venture in Brazil, following the breach of the Fundão tailings dam and Santarém water dam on 5 November 2015 that killed at least 17 people.
The company has reiterated annual production guidance for oil, copper and coal and said it forecast underlying attributable profit for the six months to 31 December 2015 to include additional charges of between $300m-$450m (£211m-317m). The charges are mainly related to write downs, rig closures onshore US and to the closure of the Crinum coal mine.
Dutch oil giant Shell also reported to investors and said fourth quarter profit adjusted for one-time items and inventory changes are expected to be in the $1.6bn to $1.9bn range (£1.1bn-1.3bn), compared with $3bn (£2.1bn) a year ago.
"Once again it's been lower oil prices that has prompted today's sell-off driven lower by yesterday's IEA announcement that the oil market "could drown in oversupply" throughout 2016," said Michael Hewson, chief market analyst at CMC Markets. "Combined with yet another downgrade to global growth from the IMF yesterday, and investors are having to digest a pretty toxic cocktail of factors that are weighing heavily on sentiment.
"As a result US oil prices slipped to new 13 year lows, below $28 a barrel [WTI crude], while Brent prices came pretty close to matching them," Hewson said.
The only FTSE 100 risers on Wednesday were goldminer Randgold Resources and scandal-ridden Sports Direct, both of which seem to climb back from falling significantly over the last trading days. Mike Ashley's Sports Direct is finding itself in another legal dispute, this time with Rangers FC in a row over a retail deal gone wrong.
FTSE 100 risers
Glencore plc -8.14 (-10.31%) 70.86
Anglo American -18.40 (-7.71%) 220.30
BHP Billiton plc -46.90 (-7.48%) 580.20
Royal Dutch Shell Plc (A) -98.50 (7.22%) 1,267.00
Carnival plc -235.00 (-6.30%) 3,497.00
FTSE 100 fallers
Randgold Resources +144.00 (+3.37%) 4,413.00
Sports Direct Intl Plc +8.60 (+2.18%) 403.25
FTSE 250 risers
WH Smith Plc +88.00 (+5.54%) 1,675.50
Pets At Home Group PLC +11.70 (+5.02%) 244.30
Ocado Group plc +6.20 (+2.39%) 265.15
AO World plc +3.00 (+2.07%) 147.20
International Public Partnerships Limited +1.50 (+1.08%) 140.60
FTSE 250 fallers
J D Wetherspoon plc -66.50 (-9.86%) 609.25
Amec Foster Wheeler plc -35.20 (-9.23%) 345.90
OneSavings Bank plc -27.40 (-8.75%) 282.35
Morgan Advanced Materials plc -18.70 (-8.72%) 196.65
Keller Group -65.50 (-8.24%) 730.75