Weir hit by global markets crossfire

Miners bore the brunt of the sell off, with the Federal Reserve’s downbeat comments on Wednesday night about the US economy sparking concern over the global recovery and demand for raw materials.

Sentiment for miners was further dented by disappointing economic data from China. Fallers included Vedanta, 171p, or 13 per cent, lower at 1,117p, Antofagasta down 141.5p, or 13 per cent, to 972.5p and Kazakhmys off 119.5p, or 12 per cent, at 846.5p.

The wider FTSE 100 index closed down 246.8 points, or 4.7 per cent, at 5,041.61 – its biggest one-day points drop since November 2008 – having touched a low of 5,013.55 earlier in the session, a 5.3 per cent fall.

Ben Critchley, a sales trader at IG Index, said: “The bears were back out in force with Tuesday’s somewhat-surprising rally now a distant memory.”

The pound hit a one-year low against the dollar, dropping as low as $1.53 at one point, after the greenback was seen as a safe haven currency despite the US’s woes. Sterling held steady against the euro at €1.14.

The Fed’s plans to launch a $400 billion (£253bn) programme to reduce borrowing costs were also met with disappointment, but it was chairman Ben Bernanke’s warning there were “significant” risks to the US economy that traders said cut the legs from under the market.

The Dow Jones Industrial Average plunged more than 3 per cent by the time London closed to follow Wednesday’s losses of 2.5 per cent. The slump spread to European markets, with the Dax and the CAC 40 both down by nearly 5 per cent after data suggested that the eurozone’s economy has almost ground to a halt.

In London, financial stocks were also battered after Moody’s downgraded the credit ratings on three big US banks and argued that the US government was more likely to allow a major institution to fail because contagion could be contained.

Barclays was down 9 per cent, or 14.4p, to 138.9p while Lloyds Banking Group slumped 3.7p to 32.5p. Among the insurers, Prudential was hardest hit after shares fell 42p to 555p, a drop of some 7 per cent.

Even luxury goods group Burberry suffered in the sell off, with its shares nearly 10 per cent lower, off 148p at 1,361p.

There were no risers in the FTSE 100 index but, in the second tier, EasyJet made impressive progress after it announced plans for an investors’ windfall.

In a move set to placate founder and major shareholder Sir Stelios Haji-Ioannou, the airline announced a £150m special dividend, on top of a £40m maiden dividend. Stelios and his family stand to pocket £57m.

Shares rose 9 per cent despite the wider market turbulence, up 28p to 340p.

Another notable gain in the FTSE 250 index came from JD Sports, which added 2p to 832.5p in the wake of Wednesday’s half-year results.