The London market plunged on Thursday as falling oil prices hit markets in the US and Japan overnight.
The FTSE 100 Index dropped 106.7 points to 5854 after Wall Street closed with heavy losses last night and the Japanese Nikkei reversed 475 points.
Rising crude stocks fuelled further falls in oil prices, with a barrel of Brent crude shedding 0.4% to US$30.17, although West Texas Intermediate climbed 0.5% to US$30.64.
Brent prices hit their lowest levels since April 2004 on Wednesday, before bobbing back above into the close.
Chief market analyst at CMC Markets UK, Michael Hewson, said: "The main question remains as to how much further crude oil prices can fall with the prospect of a move towards the 2004 lows at US$28 the potential next target."
With the Bank of England's monetary policy committee set to announce another UK interest rate hold on Thursday, it fell to retailers to provide the market interest in London.
Tesco (LON:TSCO) surprised with news of higher festive sales, sending its shares 6.7p, or 4.2%, higher to 165p. The supermarket chain said group like-for-like sales in the six weeks to January 9 gained 2.1%.
Discounter B&M European (LON:BME) was also a big riser, gaining 6.27% to 272.8p after reporting a 23.5% increase in sales revenue between September 27 and December 26.
JD Sports Fashion (LON:JD.) raced ahead 47p, or 4.4%, to 1105p as it upped its profits forecast for the current year by 10% after double digit sales growth over Christmas.
But investors got a sour taste in their mouths from an update by Frankie & Benny's owner Restaurant Group (LON:RTN), which said like-for-like sales growth would be lower as the firm feared tough trading would not ease in 2016. Shares slumped 81p, or 12.7%, to 557p.
Elsewhere, fund manager Miton Group (LON:MGR) advanced 8.5% to 28.75p on news of significant momentum with £463mln of net inflows.
MARKET PREVIEW
London’s FTSE 100 is set to give up about 1% as the market opens on Thursday, following US benchmarks lower after the price of crude plunged again.
Wall Street closed with heavy losses last night. The Dow Jones ended down 365 points, 2.2%, at 16,151 while the S&P 500 and Nasdaq Composite lost 2.5% and 3.45 respectively.
Technicians pointed out that at current levels the major US indices are now approaching territory that would be considered a ‘correction’ - i.e. 10% off the highs.
It came as Brent crude set yet another 12-year low, dipping below US$30 briefly. Currently, the Brent contract is down just over 2% at US$30.22 while West Texas Intermediate has edged slightly higher to trade at US$30.80.
In Asia, China’s Shanghai Composite was rebounding with a near 2% gain. The other markets, however, saw red.
Japan’s Nikkei fell around 2.7% to 17,240. Hong Kong’s Hang Seng dipped 0.4% to 19,860. And, Australia’s ASX 200 was about 1.5% lower at 4,909.
London’s FTSE 100 is being called some 58 points lower by spread-betting and CFD firm IG Markets, which quotes the blue-chip benchmark at 5,889 to 5,895.