Business

UK shares slump amid global sell-off

Market trader (file picture) Image copyright Getty Images

The FTSE 100 slumped 3.5% as investors fretted over global growth prospects and falling oil prices.

The UK's benchmark index closed down 203.2 points at 5673.58, and has now entered a "bear market" having fallen 20% from its record high in April.

Indexes across Europe also tumbled, with Germany's Dax down 2.8% and the Cac-40 in Paris dropping 3.5%.

Shares in Shell were down about 7% after it said that annual profits would be slightly below City expectations.

Oil shares were also hit by the continued fall in crude prices. Brent crude fell 4% $1.16 to $27.60, while US crude dropped more than 5% to $27.01.

Crude oil prices have been falling since 2014 but despite that fall, producer countries have maintained output.

On Tuesday, the International Energy Agency warned that oil markets could "drown in oversupply" in 2016.

Mining shares were also hit hard. Glencore shares fell nearly 10% while BHP Billiton fell more than 7%.

BHP Billiton released a production report containing what investors interpreted as gloomy comments about the outlook for commodity prices.

Shares in WH Smith led the FTSE 250 higher, with a 5.8% gain. The company said it expects annual profits to be "slightly ahead" of expectations, due to strong sales over the five-week Christmas period.

On the currency markets the pound was one fifth of a cent higher against the dollar at $1.4178, and one tenth of a euro cent higher against the euro at €1.2990.

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