Footsie loses £27bn as fears remain high

Market report Emma Newlands

More than £27 billion was wiped off the value of blue-chip stocks as investors remained spooked by the simmering tensions between the United States and North Korea.

The FTSE 100 Index closed down 1.4 per cent, or 108.12 points to 7,389.94, with Pyongyang unveiling plans to launch a volley of ballistic missiles towards the US Pacific territory of Guam, an American military hub.

David Madden, market analyst at CMC Markets UK, said: “Whenever dealers hear the word ‘war’ they usually run for the hills, and that is exactly what we have seen today.”

The top-flight also sank lower as a number of stocks went ex-dividend. It was the biggest daily fall on the FTSE 100 since 18 April when the market lost 180 points,

On the currency markets, the pound edged 0.2 per cent lower versus the US dollar at $1.298, as traders responded to another tranche of lacklustre data from the UK economy. Sterling was also down 0.1 per cent versus the euro at €1.104.

Focusing on UK stocks, BT and Lloyds Banking Group were among the biggest fallers after going ex-dividend. BT down was 14.4p to 298.9p, while Lloyds fell 2.1p to 64.83p.

Prudential was also down on news of plans to merge its M&G asset management arm with its UK life and pensions business, likely to trigger job losses. Shares were down 15.5p to 1,826p.

The biggest risers on the FTSE 100 Index included Coca-cola HBC, up 219p to 2,592p, and Worldpay, up 19p to 407.5p.

The biggest fallers included Rio Tinto, down 119.5pto3,479.5p,and Intercontinentalhotels Group, down 128p to 4,036p. The baked goods specialist, which recently posted a sales jump, closed as the best performer on the FTSE 250 after being upgraded by Berenberg. The Aim-quoted investment management firm fell after revealing the sale of Tavistock Financial to Sanlam UK for £1 million.