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FTSE 100 sinks 1.5% amid concerns over Turkey currency crisis

7:25 pm, 15th August 2018

The benchmark index slid 1.49% to 7497.87, its lowest close since 27 April, as metal and oil stocks plunged.

Mining stocks were the biggest fallers on the FTSE 100 as the price of copper fell to a 13-month low on concerns for growth in China.

Mexican-based miner Fresnillo racked up the biggest fall, down 7.7% to 918.24p.

BHP Billiton dropped 5.2% to 1640.5p, Anglo American fell 6.2% to 1542.2p, Antofagasta dipped 5.6% to 849p and Rio Tinto declined 3.3% to 3674p.

“We are being treated to a mid-summer ‘sea of red’ in equities, as the morning’s drift lower turns into a full-blown rout,” Chris Beauchamp, chief market analyst at IG, said.

He added: “The stronger dollar has hobbled commodity prices, hitting mining stocks across Europe, with the FTSE 100’s list of losers dominated by mining names like Glencore and BHP Billiton.

“While already crowded, it looks like a few more people have joined the long-dollar trade, as emerging market jitters encourage more funds into the US currency, seen as a safe haven from both the Turkey crisis and trade wars.

“The ingredients for a classic summer swoon are all there, from rising volatility to an emerging markets crisis, just the thing to provide some excitement before normality returns in September.”

The pound fell below $1.27 against the US dollar for the first time since June last year.

A surprise rise in US crude inventories sent oil prices lower. Brent Crude, which is used to prices most international oil, fell 2.3% to $70.77 a barrel, while WTI dropped below $65 a barrel, or more than 3%.

Oil giants BP fell 1.8% to 545p and Royal Dutch Shell dropped 1.8% to 2474.5p.

Markets across Europe also closed in the red. The Xetra Dax in Frankfurt closed down 1.6% and the CAC 40 in Paris declined 1.8%.

The pan-European EURO STOXX 600 was down 1.5%.

Walls Street is set for its it biggest one-day drop in two months, down more than 1%, with tech stocks leading the declines.