UK and European stocks turned sharply south on Wednesday (24 February) as mining stocks and luxury items retailers were under the cosh for the second consecutive session, while oil prices fell again.
London's FTSE 100 stocks fell 1.60% to 5,867.18, while its European counterparts fared even worse, with Germany's Dax and France's CAC 40 losing 2.64% and 1.96% respectively, while the Pan-European Stoxx 600 fell 2.31%. Oil prices extended the previous session's losses, tumbling to a new low for the week and fuelling a fresh bout of volatility.
"Despite recent attempts to allay the slide in crude price through the discussion of an output freeze, comments out of Saudi Arabia, Iraq and Iran have restored fears of an extended oil glut for years to come," said IG's market analyst Joshua Mahony.
"It is now clearer than ever Saudi Arabia is in it for the long run and want low prices to persist until the high-cost producers exit the market. With Iran calling plans to freeze output 'laughable', and Iraq reiterating plans to raise production to 6m barrels per day by 2020, there is no doubt this oversupplied market is here to stay."
Mining stocks were among the worst performers on London's blue-chip index, with Glencore, Anglo American, Rio Tinto and BHP Billiton all firmly in the red, with the latter falling for the second consecutive session following news it slashed its interim dividend by 75%.
"The widening losses in the FTSE commodity sector and the troublesome performance from sterling – which, admittedly, has lifted away from its earlier low – ensured the index got a swift, if unneeded, reminder of everything that could go wrong in the next few months," said Spreadex's financial analyst Connor Campbell.
Burberry was also on the back foot, extending its losses over the last two days to 9% as the luxury sector was under pressure after Hugo Boss issued a profit warning on 23 February.
At the other end of the scale, housebuilders made good ground, with both Persimmon and Barratt Developments moving higher, as the latter revealed pre-tax profit over a six-month period jumped by 40% on the back of more homes in the UK being sold at an increased price.
Among FTSE 250 stocks, International Personal Finance tumbled over 12% after its full year revenue and profit before tax fell, while recruitment group Hays saw shares fall over 8% after it warned conditions for its UK business, especially in the second half of the year, remained challenging.
FTSE 100 - Top 5 risers
Randgold Resources +1.84%
Barratt Developments +1.51%
Intertek Group +1.34%
FTSE 100 - Top 5 fallers
Anglo American -9.94%
BHP Billiton -8.30%
Rio Tinto -5.86%
Coca-Cola HBC -5.08%
FTSE 250 - Top 5 risers
Entertainment One Limited +10.29%
CLS Holdings +5.56%
Acacia Mining +5.52%
Petrofac Ltd. +4.45%
Riverstone Energy Limited +4.43%
FTSE 250 - Top 5 fallers
International Personal Finance -13.61%
Amec Foster Wheeler -9.23%
Man Group -7.99%
Capital & Counties Properties -7.78%