Britain’s top share index dropped on Wednesday to resume its recent slump after a bounce in the previous session, led down by stocks exposed to turbulent emerging markets.

Financials and consumer staples, sectors which have high global exposure, combined to take more than 20 points off the FTSE 100. The index was down 46.56 points, or 0.7 per cent, at 6,285.27 points at 0850 GMT.

Roubles crashes

Russian assets were volatile again on Wednesday as the finance ministry battled to defend the rouble. The currency has crashed to record lows, hurt by sanctions and a slide in oil prices.

Weakness in Russia has hit other emerging markets, with the South African rand and Asian shares slipping on Wednesday.

Although few stocks on the FTSE 100 have substantial exposure to Russia, South African paper maker Mondi fell 3.9 per cent, the biggest decline in the FTSE 100. Asia-focussed bank HSBC dropped 1 per cent to take the most points off of the index.

“The emerging markets are a concern at the moment, and we’re seeing money coming out of anyone with exposure to those parts of the world,’’ said Manoj Ladwa, head of trading of TJM Partners.

The FTSE 100 rose 2.4 per cent last session but remains down 6.5 per cent in December.

Oil cos steady

Oil companies held roughly steady. Although Brent fell below $60 dollars again on Wednesday, it was off its Tuesday lows.

However, Petrofac fell 2.2 per cent after a downgrade to “neutral’’ from “buy’’ by Citi. The energy-services company is now down 45 per cent for the year as the slump in oil raises the prospect of oil majors cutting their spending on services.

Dixons Carphone bucked the trend, rising 3.4 per cent. The electricals and telecommunications retailer posted a 30 per cent increase in first-half profit on the back of gains in market share and said it was on track to meet expectations for the full year.

“They seem to be discounting quite heavily, so margins could come under pressure. If they can deliver moving into 2015, that will encourage the market further,’’ said Zeg Choudhry, managing director at LONTRAD.

Related Topics