Markets dive into red amid commodity price rout

Stock markets worldwide dived into the red amid a commodity price rout in which the cost of oil touched below $40 a barrel for the first time since February 2009.

The FTSE 100 Index closed 1.4 per cent lower at 6135.2. The picture was similarly gloomy in Europe, with Germany's Dax off 2 per cent.

Miners led the declines in London as metal prices plunged lower after more disappointing Chinese economic data. Anglo American compounded sector losses after it suspended its dividend and unveiled a major overhaul.

Oil prices remained in the spotlight as benchmark crude fell back below $40 a barrel. It later rallied, offering some support to blue-chip giants BP and Royal Dutch Shell after a punishing session.

DUBLIN

Dublin’s Iseq fell 1.3 per cent to 6,756, matching performances elsewhere. The fall in global commodity prices hit several companies hard.

After jumping 66 per cent on Monday, Kenmare Resources fell by 20 per cent to just less than 1 cent. Dragon Oil recovered earlier losses to close 0.2 per cent up at €10.95 following a late rally in oil prices.

Smurfit Kappa dropped 4.2 per cent to €23.85. Fellow Iseq heavyweight CRH fell 1.7 per cent to €26.98. Ryanair fell 0.7 per cent to €14.59, in line with industry rivals.

Hotel group Dalata fell marginally to €5.11 amid ongoing reports it is in pole position to buy a prime Dublin hotel. Applegreen fell nearly 2 per cent to €5.40.

LONDON

Anglo American was the hardest hit. Its shares sunk to a new record low, down another 12 per cent, as it said it would more than halve its assets and make more mammoth job cuts, slashing its workforce to about 50,000 from 135,000. Its shares were 45.4p lower at 323.7p, having already been decimated over the past year.

Rio Tinto and Antofagasta followed not far behind with falls of 173p to 1893p and 36.2p to 441.7p respectively.

BP, which dropped 3 per cent on Monday on sharply lower oil prices, clawed back from early session losses to finish 0.2p higher at 347.8p. Sainsbury's was the only other blue-chip riser, up 3p at 244.7p. The sector had spent most of the earlier session in positive territory as market analysts said sales data showing a poor Black Friday performance meant the big players were able to protect their profit margins.

EUROPE

The FTSEurofirst 300 index fell 1.8 per cent to 1,437.77 points, its lowest close since late October. The STOXX Europe 600 Basic Resources sector dropped 6.6 per cent to its lowest level since March 2009.

Among stocks moving on corporate news, Bouygues advanced 1.6 per cent as Orange was said to be in early discussions to buy the French conglomerate's telecommunications and media assets.

Orange slipped 0.2 per cent, erasing earlier gains of as much as 1.9 per cent. Klepierre added 1.1 per cent after Euronext said the French property company will replace Electricite de France in the CAC 40 Index on December 21st.

NEW YORK

The Dow Jones Industrial Average opened deep in negative territory, falling more than 140 points in early trading.

A sell-off in energy and raw-material companies dragged the S&P 500 further away from a May peak, after rising to within 1.4 per cent of that level on December 1st. The benchmark is coming off a week that featured moves of at least 1 per cent in four consecutive days, the longest stretch since August.

Southwest Airlines decreased 8.1 per cent to lead industrial shares lower. United Rentals and Ingersoll-Rand fell more than 2.4 per cent. A Bloomberg index of US airlines dropped 4 per cent. Spirit Airlines , Delta Air Lines and United Continental holdings fell at least 2.9 per cent. Kinder Morgan and Diamond Offshore Drilling lost more than 3.6 per cent to lead the drop in energy, with Anadarko Petroleum falling to its lowest level since September 2010.