19th August 2015
The FTSE 100 closed at 6,403, the lowest level since January 14 when it closed at 6,388.
This was despite the fact that the German MPs today approved a third bailout deal for Greece, demonstrating that other factors are now dominating investor sentiment.
Mining stocks were at the forefront of the fall, with Glencore’s share price dropping over 8% after a poor set of results. Rio Tinto, Anglo American and BHP Billiton each fell by around 4%.
Laith Khalaf, senior analyst at Hargreaves Lansdown, says: “Markets are looking east and don’t like what they are seeing. Slowing economic growth, currency devaluation, and stock market mayhem in China have hit commodities and mining stocks, and with them the UK stock market.
“The fact UK stocks fell so steeply today despite Germany signing off on the Greek bailout underlines how peripheral this issue has now become, and how quickly the market can switch its focus.
“The fate of Footsie is of course deeply entwined with that of the oil and mining companies, which together make up around of a fifth of our benchmark index. Outside of these sectors, things are going much better. The FTSE 100 has returned 0.5% so far this year, including dividends, but if you strip out oil and mining stocks it has returned 4.8%.
“However the millions of people who are exposed to the whole index through their pensions and investments have been dealt a pretty heavy blow by the turmoil in China, and the collapse in commodity prices. Nonetheless they are still just about in positive territory since the beginning of the year, and those invested in active funds run by managers who have dodged the mining sector have probably fared a lot better.”