London close: Stocks sink to lowest since early January

(Sharecast News) - UK stocks suffered a broad sell-off on Thursday, sending London's blue chips to their lowest levels since the start of the year, with investors digesting the latest policy decisions from central banks along with yet more wild swings on energy markets amid ongoing developments in the Middle East. The FTSE 100 dropped 2.4% to 10,063.50 - its lowest finish since 8 January - with losses of 2% or more registered across most major European indices. Wall Street's three benchmarks, however, opened around 0.6-0.7% lower.

European natural gas futures were up double-digits at a three-year high, while Brent crude was another 2.3% higher at a four-year high.

Meanwhile, markets were also reacting to policy decisions from the Federal Reserve, Bank of England, Riksbank, European Central Bank and Swiss National Bank - all of whom decided to stand pat on interest rates owing to geopolitical and macroeconomic uncertainty.

UK investors were mostly focusing on the BoE announcement at midday, with the central bank leaving interest rates on hold on at 3.75% as soaring energy prices continued to climb in response to war in the Middle East. The rate-setting Monetary Policy Committee voted unanimously to leave the cost of borrowing unchanged.

Susannah Streeter, chief investment strategist at Wealth Club, said: "Bank of England decision-makers have understandably turned super-wary as war rages in the Middle East, with an energy crisis mounting and inflationary pressures building sharply. Shockflation fears are rising as oil and gas prices escalate to scorching levels, which risk spilling over into broad price rises across the economy.

"They are now forecasting that the headline rate of inflation will rise to 3.5% in March, almost half a percentage point higher than expected in the February Report. So, they feel they have little choice but to sit on their hands, watching and waiting to see how the conflict evolves."

Energy prices jumped after Iran attacked the world's largest liquefied natural gas (LNG) export plant in Qatar at the Ras Laffan Industrial City. Iran had warned it would target energy assets across the Gulf following Israel's attack on the South Pars gas field.

US President Donald Trump threatened on Truth Social to "massively blow up" Iran's gas fields if Tehran continues to target energy assets in Qatar.

Precious metals miners, housebuilders slump

Miners were under the cosh amid weaker metals prices, with Antofagasta, Rio Tinto and Anglo American all sharply lower. Precious metals miner Fresnillo and gold miner Endeavour fell as gold and silver prices retreated.

Housebuilders also dropped as concerns build that inflation will hold back consumer sentiment - and potentially lift interest rates - over the coming year, with Barratt Redrow and Persimmon among the worst performers.

BP was among just three risers on the FTSE 100 after the oil giant said it had sold its Gelsenkirchen refinery and related businesses to independent European refiner Klesch Group for an undisclosed sum, saving around $1bn in operating expenditure.

NatWest, M&G, Standard Chartered and Melrose all slumped as they traded without entitlement to the dividend.

Market Movers

FTSE 100 (UKX) 10,063.50 -2.35% FTSE 250 (MCX) 21,560.04 -2.36% techMARK (TASX) 5,720.02 -1.88%

FTSE 100 - Risers

BP (BP.) 583.20p 4.93% Games Workshop Group (GAW) 17,300.00p 0.35% The Sage Group (SGE) 839.60p 0.29%

FTSE 100 - Fallers

Barratt Redrow (BTRW) 263.40p -8.45% NATWEST GROUP (NWG) 533.60p -8.10% M&G (MNG) 278.80p -7.71% Fresnillo (FRES) 3,076.00p -7.41% Standard Chartered (STAN) 1,517.50p -6.93% Weir Group (WEIR) 2,740.00p -6.16% Melrose Industries (MRO) 486.80p -5.77% Persimmon (PSN) 1,130.50p -5.71% Antofagasta (ANTO) 3,273.00p -5.65% Rolls-Royce Holdings (RR.) 1,190.00p -5.22%

FTSE 250 - Risers

Ithaca Energy (ITH) 284.00p 12.03% Harbour Energy (HBR) 318.80p 9.33% Diversified Energy Company (DI) (DEC) 1,196.00p 8.33% IG Group Holdings (IGG) 1,445.00p 6.17% Greencoat UK Wind (UKW) 102.50p 5.67% Trustpilot Group (TRST) 244.60p 3.03% Raspberry PI Holdings (RPI) 334.00p 2.45% RTW Biotech Opportunities Ltd (RTW) 1.96p 2.35% Energean (ENOG) 921.50p 2.05% The Renewables Infrastructure Group Limited (TRIG) 68.90p 1.92%

FTSE 250 - Fallers

Pan African Resources (PAF) 127.20p -10.17% Hochschild Mining (HOC) 545.50p -7.93% Vistry Group (VTY) 352.00p -7.83% Endeavour Mining (EDV) 4,086.00p -7.26% Abrdn (ABDN) 192.00p -7.25% BlackRock World Mining Trust (BRWM) 823.00p -6.90% Lancashire Holdings Limited (LRE) 573.00p -6.68% Wickes Group (WIX) 206.00p -6.58% Johnson Matthey (JMAT) 1,797.00p -6.06% Wizz Air Holdings (WIZZ) 870.00p -6.05%