The FTSE 100 plunged further into the red today to compound the misery of investors who have endured the worst month on the stock market in three years in May.
Investors ditching shares on the back of more grim economic news, sent the index of Britain’s biggest companies down more than 1 per cent today.
The Footsie closed down 61 points at 5,260, and May was its worst month of trading since February 2009.
Tumbling price: The stock market has dived into the red and suffered its worst month in more than three years
The index fell 417 points in May – losing 7.3 per cent of its value as the eurozone debt crisis has escalated again and investors batten down the hatches.
That performance is slightly worse than last August when the market fell 7.2 per cent. Taking into account today’s falls, the market has fallen 477 points since the start of May, losing 8.3 per cent.
Further bad economic news arrived today with the weakest US jobs growth in a year and figures showing that expansion in China’s manufacturing sector all but ground to a halt last month.
Jason Conibear, a director at forex specialists Cambridge Mercantile, said: ‘A few months ago the feeling was that a strong China and resurgent US would steer the eurozone through its current plight.
‘Now the fear is that these economies could themselves be sucked into the rapidly spiralling eurozone vortex.’
Volatile: A fresh escalation of the eurozone debt crisis has hurt the stock market, which is now down on the start of the year
The FTSE 100’s ride into the red has mirrored falls on markets around the world.
Today the Dow Jones Industrial Average was down 1.7% following the poor Non-Farm Payroll jobs figures, while declines were even heavier on markets in Germany and France, with the Dax down 3% and the CAC 40 off 2%.
City commentator David Buik, of the broker BGC Partners, said: ‘The Non-Farm-Payroll numbers were deeply disappointing – 69,000 jobs were created in May against expectations of more than 150,000. ‘
At home, confidence took another dent, with figures showing manufacturing orders dried up so badly in May that the Markit/CIPS index saw the second steepest fall in its 20-year history.
The index, which records production, fell to 45.9 from 50.2, well below City hopes for a figure at just below 50. Order books from domestic firms shrunk at a faster rate than export orders.
CIPS chief executive David Noble said: ‘The harsh realities of the weak global economy and sluggish domestic demand are bearing down on UK manufacturing.
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