FTSE hits three-year low, business confidence slumps 

FTSE 100 sheds more than 100 points, with technology and financial shares worst hit, as global growth fears reignite.

The FTSE 100 has tumbled to a fresh three-year low, hit hard by a sell-off in technology, financial and industrial shares as investor fears over global growth reignited.

The UK blue-chip index dropped 110 points, or 1.9%, to 5,736, its lowest level since December 2012, as fresh data showed that confidence among UK business had fallen to a three-year low.

Technology shares were hit hardest by the sell-off, with chip maker ARM the biggest faller on the index, down 5.4% at 929.5p, in the ongoing fallout from main customer Apple’s (AAPL.O) warning last week that sales of iPhones would start to fall this year.

Small cap rival Imagination Technologies meanwhile dropped 4.6% to 125.8p after warning it would make a loss this year, blaming a slowing market and uncertainty over China.

The sell-off in technology shares also hit the Allianz Technology investment trust, which fell 4.2% to 546.6p.

Financial stocks were also badly hit, with online stockbroker Hargreaves Lansdown down 4.1% to £11.70, London Stock Exchange dropping 3.8% to 440.4p and HSBC down 3.8% at 440.4p.

Rolls-Royce meanwhile dropped 3.9% to 509p on fears the aeroplane engine manufacturer would announce a dividend cut in results due on Friday.

‘Share price thrusters in reverse at Rolls-Royce this morning on news management is set to meet Thursday to discuss the extent of its first dividend cut in more than 20 years,’ said Mike van Dulken, head of research at Accendo Markets.

‘The possibility of a cut to income is a major theme among corporates as they deal with margin pressure amid a tough economic environment and while Rolls-Royce’s yield is far from the high single digits at risk among commodity-focused names, it highlights how bad things have got (as if five profit warnings in less than two years wasn’t bad enough).’

Among the few FTSE 100 stocks to make gains were precious metals miners, as investors flew to the safe havens of gold and silver. Randgold Resources was up 2.6% at £54.40 and Fresnillo rose 1.2% to 797.5p.

Source: CityWire

---