London’s blue-chip stocks tumbled in the late morning to sit significantly lower as they were dealt a double blow from China and Greece.
“China and Greece have been dominating the headlines in recent months, and now they have both taken a nasty turn at the exact same moment, leaving traders terrified as panic selling becomes widespread” David Madden at spread betting firm IG said.
“Greece is staring into the political abyss and China is cooling off at an alarming rate.”
Alexis Tsipras has stepped down and called an election in an effort to remove some of the extreme left wing members in the Syriza party, but there is no guarantee he will be re-elected.
Meanwhile, downbeat Chinese manufacturing data showed manufacturers suffered the worst August reading for the Caixin flash manufacturing PMI in six years.
The FTSE 100 was off 94 points at 6,274, with insurance firms RSA (LON:RSA), Prudential (LON:PRU) and Old Mutual (LON:OML) prominent among the worst performing index constituents, with losses of more than 2%.
Drugs giant GlaxoSmithKline (LON:GSK) was off 1.9% at 1,345p, despite trousering US$1bn with the sale of the rights to auto-immune system drug ofatumumab to Novartis.
Among the mid-caps, Spire Healthcare (LON:SPI) takes a mighty tumble, down 13.1% at 349p, after its half-yearly report.
Adjusted underlying earnings (EBITDA) in the first half of the year rose 8% to £83.4mln and although the company declared a maiden interim dividend, investors were spooked by indications that “there may be some near-term weakness in NHS demand over the remainder of this financial year”.
The day’s biggest gainer was tiddler Marechale Capital (LON:MAC), up 248% at 6.7p, after it confirmed press speculation confirms that a meeting of the Full Planning Committee of Kettering County Council is scheduled to be held on 25 August 2015 to consider the planning application made in respect of Desborough Airfield, the proposed site of the Northfield UK Solar Limited project .
“Whilst the development control manager has recommended to the committee that the Application be approved, no decision has yet been made,” the company said.
Software Radio Technology (LON:SRT) was wanted after it won a US$5mln contract to provide a national authority with its AIS Maritime Domain Management (MDM) system.
The marine communications specialist’s shares floated 1.25p higher to 30.5p.
At the opposite end of the share price performance spectrum was Techfinancials (LON:TECH), which lost more than a quarter of its value after a profit warning.
The software developer said underlying earnings in the first half of the year, while positive, have been affected by an increase in spending on research and development.
Another company shedding a quarter of its market value was Kodal Minerals (LON:KOD), after it published the results of its drilling campaign at the Grimelli copper and zinc project in western Norway.