The FTSE 100 fell a whopping 1.7% with a 134 point drop to 7,450 following a whole host of bad news across the world.
After the Bank of England cut its growth forecast for the UK as it warned of the dangers of a no-deal Brexit, US president Donald Trump again used Twitter to move markets, announcing a fresh 10% tariff on another $300bn of Chinese goods, which effectively means all Chinese imports to the US will now be taxed.
The move hasn’t gone down well in Beijing, which has threatened to retaliate. US markets fell sharply last night, while many Asian and European markets opened 2% or more lower today.
A staggering 94 stocks out of the FTSE 100 opened lower this morning.
The FTSE 250, considered more representative of the actual UK economy, also had a bad time, dropping 1% to 19,426.72.
One of the big fallers in the UK’s benchmark index was Royal Bank of Scotland (RBS), which dropped 5.3% to 206p despite reporting a massive jump in pre-tax operating profit to £1.68bn in the second quarter.
The bank also announced an annual dividend of 2p per share, as well as a special dividend of 12p a share.
But the market was more concerned about its outlook for next year, with RBS saying it is ‘very unlikely’ now to meet its target return on equity of 12% and its cost:income ratio of less than 50% in 2020.
Adjusted revenue was also down, dipping 1% to £5.63bn, which it blamed on decreasing demand from its business units that sell phone services to businesses and consumers, with the traditional lines and calls market continuing its declining trend.
But the firm said its results were in line with expectations and it is making ‘good progress on its objectives.
Its chief executive Philip Jansen said: ‘We will continue to take decisive action, including on price, to further strengthen our customer propositions and market position, both to respond to any short-term market pressures and to capitalise on longer-term opportunities.’
British Airways owner International Consolidated Airlines (IAG) was one of the lucky six trading higher, as it jumped 4.2% to 431p after it reported a 7.9% increase in revenue to €12bn for the six months to 30 June.
Operating profit was down 41% to €1bn, while the firm said it plans to ‘vigorously defend’ itself against the record £183m fine slapped on it by the Information Commissioner’s Office.
Pets at Home (PETS) rose 0.5% to 216p and was as high as 228p at one point this morning after a positive trading statement in which revenue was up 10% to £303.4m in the 16 week period to 18 July, leading the firm to expect its underlying profit for the year to be slightly above market expectations.
It also declared an interim dividend of 6.6c per share, a 100% increase on last year.
However, its underlying EBITDA margin fell 1% to 22.1%, while its underlying earnings per share nudged only marginally higher to 7.7p, up from 7.6p in the first half of last year.
Plastic and fibre product supplier Essentra (ESNT) dropped 0.8% to 418p, as it reported marginal increases in revenue and profit in the six months to 30 June, while its dividend per share remained unchanged. Net debt increased to £242m, but its net debt-to-EBITBDA ratio decreased to 1.6-times.
Hotel operator Millennium & Copthorne (MLC) rose 0.75% to 685p following a 3.4% increase in revenue per available room – a key industry metric – to £77.82 in the half year to 30 June, offsetting concerns on its overall revenue and profit, which dropped 1% and 29.2% respectively.