UK stocks had one of their worst trading days in the past few weeks, with the FTSE 100 falling 2.36% on 2 February. The sell-off came as oil companies suffered from falling oil prices, with benchmark Brent Crude trading below $33 (£22.9, €30.3).
Oil giant BP reported a sharp decline in underlying operating profit for the full year and for the fourth quarter. Impairment costs related to its upstream assets and the ongoing slump in crude prices hit the oil giant.
Oil prices have fallen by a quarter since the start of 2016 and have dropped 75% over the past 18 months amid growing concerns over a slowdown in the Chinese economy and concerns over a global oversupply, which has been exacerbated by Iran's return to the global scene.
In 2015, BP's annual profit fell 51% year-on-year to $5.9bn (£4.1bn), while underlying operating cash flow plunged 38% compared with the corresponding period a year earlier to $32.8bn. On a quarterly basis, the group saw its underlying profit tumble from $2.2bn to $196m and it posted a $2.2bn operating loss after booking $2.6bn in non-operating post-tax charges in the period, primarily related to impairments of upstream assets as well as restructuring charges.
Dutch oil company Shell, which is set to sign the official documents for the takeover of smaller rival BG, warned its profits are set to suffer a similar decline. Shell has cut thousands of jobs in an effort to deal with the oil prices.
Commodity miner Anglo American was among the biggest fallers on the FTSE 100. The company, which has lost more than two thirds of its share price, is at risk of falling out of the FTSE 100 at the re-weighting set to take place in March.
Anglo American fell more than 8% following news that the company might fully dispose of all its Brazil divisions. The miner has already offered more than $1bn worth of Brazilian assets up for sale.
On the upside of the FTSE 100 was Sainsbury's. The grocer's share price soared after it submitted a fresh takeover bid for Argos owner Home Retail Group worth £1.3bn, after its first offer was turned down early in January.
FTSE 100 biggest risers
Associated British Food +1.59%
Admiral group +0.40%
FTSE 100 biggest fallers
Anglo American -7.99%
BHP Billiton -6.74%
Legal and General -6.71%
FTSE 250 biggest risers
Allied Minds +7.58%
Circassia Pharmaceuticals +3.64%
Cable and Wireless +2.43%
Ted Baker 2.15%
FTSE 250 biggest fallers
Weir Group -8.70%
Tullow Oil -7.39%
Amec Foster Wheeler -6.21%