FTSE 100 plunges to lowest close since November as global stocks rocked

The blue-chip index shed 161.6 points, dropping 2.17%, to 7,280.5.

FTSE 100 closes at lowest level since November (Yui Mok/PA) (PA Archive)

The UK’s FTSE 100 has plunged at its lowest point since November as US interest rate fears weighed heavily on global sentiment.

It was a bruising session for stock markets around the world as a new payrolls report showed the US private sector jobs market was stronger than expected.

While good news for workers, it could put more pressure on the central bank to keep raising interest rates to keep spending under control.

A meeting of Federal Reserve policymakers yesterday evening indicated that further rate rises could be on the way amid the lingering threat of inflation pressures.

Nearly all stocks on London’s FTSE 100 were trading lower on Thursday, while housebuilders and retailers were among the index’s worst performers.

The blue-chip index shed 161.6 points, dropping 2.17%, to 7,280.5. It hit its lowest level since March during the day, and closed at the lowest since November 3.

Fears over higher rates and slower growth has tipped the FTSE 100 to its worst day since the big sell-off in March

Michael Hewson, chief market analyst at CMC Markets UK

Michael Hewson, chief market analyst for CMC Markets UK, said: “Fears over higher rates and slower growth has tipped the FTSE 100 to its worst day since the big sell-off in March, as well as its lowest levels since then, as well as clobbering the FTSE 250, with weakness manifesting itself across the rest of European markets, after last night’s Fed minutes showed that the decision to pause rate hikes wasn’t the cut and dried decision that many thought it was.”

He added that the US jobs report “cemented the idea that Fed officials are very serious about meeting their inflation target and the resilience of the labour market will only likely reinforce this view”.

France’s top index suffered an even steeper decline on Thursday with the Cac shedding 3.13% at close and losing nearly 230 points over the day. Germany’s Dax also fell 2.57% at close.

Weak trading kicked off the day over in the US where the S&P 500 was down 1% and Dow Jones 1.3% lower by the time European markets closed.

The pound, meanwhile, jumped on the back of the downbeat US mood and was up 0.2% against the US dollar to 1.2728. It was relatively flat against the euro at 1.17.

In company news, shares in airline Jet2 fell by more than a tenth after the package holiday company and airline announced that its executive chairman would be stepping down from the board.

Philip Meeson bought the firm 40 years ago as a small cargo carrier and grew it into Britain’s biggest package holiday provider.

Despite the company revealing it returned to a profit in the latest financial year, it was not enough to please investors and its share price closed 10.5% lower.

It was an equally choppy session for electronics retailer Currys which said it would not declare a final dividend payment to shareholders as it faces an uncertain economic backdrop.

The company’s chief executive said the retailer was facing “depressed demand, high inflation and unforgiving competition” in all its markets. Its share price closed 9.7% lower.

The biggest risers on the FTSE 100 were United Utilities, up 14.4p to 947.2p, Tesco, up 0.5p to 249.3p, and Severn Trent, up 1p to 2,451p.

The biggest fallers on the FTSE 100 were Glencore, down 25.2p to 432.75p, Next, down 372p to 6,582p, Antofagasta, down 78.5p to 1,391.5p, Flutter Entertainment, down 815p to 14,520p, and JD Sports Fashion, down 7.25p to 138p.