A selloff gripped U.K. stocks Monday, with blue chips suffering as part of a global rout in equities that was sparked by worries about the health of China, the world’s second-largest economy.
The FTSE 100 UKX, -4.67% fell 4.7% to end at 5,898.87, and just one of its components managed to advance, as RSA Insurance Group PLC RSA, +0.75% gained less than 1%. The blue-chip index endured its largest one-day percentage fall since March 2009, and wiped out £86 billion ($135 billion) in market value with Monday’s slide.
The London index also saw its 10th consecutive loss, marking its longest losing streak since 2003.
Adding to the slate of dreary FTSE 100 factoids, the index is down 17% from its all-time high of 7,103.98 set on April 27. Year-to-date, it’s lost 10.2%.
“At present, markets are concerned by just how weak China and other emerging economies are. Economists, on the flip side, fret that the market selloff will weigh on growth. Both fear that policy makers today hold less effective ammunition to tackle downside risks,” said Michala Marcussen, chief economist at Société Générale, in a note.
Stocks with particular exposure to China led decliners on the U.K. index, coming after Chinese stocks tumbled and lost their gains for the year. Investors brushed off a change in rules in China that will now allow pension funds managed by local governments to invest in stocks. There had been speculation that Beijing over the weekend would provide more support for the financial system. The Shanghai Composite SHCOMP, -8.49% slid 8.5%.
“Setting recent commodity, FX and equity-market movements in the timeline of economics, we find that the impact to date does not yet constitute a major headwind,” Marcussen added.
On the FTSE 100, mining heavyweights Glencore PLC GLEN, -13.02% GLCNF, -10.44% and BHP Billiton PLC BLT, -9.20% BHP, -4.18% BHP, -5.02% were among the sharpest decliners as shares fell 13% and 9.2%, respectively.
Iron-ore and platinum producer Anglo American PLC AAL, -9.91% also tumbled, dropping 9.9%.
Asia-focused bank Standard Chartered PLC STAN, -4.50% fell 4.5%, and HSBC Holdings PLC HSBA, -6.42% HSBC, -3.97% 0005, -4.31% dropped 6.4%.
Oil major Royal Dutch Shell PLC RDS.B, -2.80% RDS.B, -2.80% was down 6.3%, although the shares landed a ratings upgrade at Jefferies to buy from hold. Oil prices CLV5, -3.26% on Monday continued to fall, losing about 4% to trade below $39 a barrel.
Jefferies said it still has “reservations” about the price of Shell’s planned purchase of BG Group PLC BG., -6.85% “However, post-transaction we believe significant further value can be added through divestitures/share repurchases and further cost savings and synergies,” wrote Jefferies analysts Jason Gammel and Mark Kofler in a research note.
In broader European trading, the Stoxx 600 SXXP, -5.33% closed down 5.3%, while the U.S. stock market dived, with the Dow industrials briefly down more than 1,000 points.