UK stocks slide as the falling copper price spooks investors
Fears that the falling price of copper could be the first sign of a global economic slowdown have sent investors running for the exits.
UK stocks slumped in early action with investors exiting miners after a tumble in copper prices triggered fears a global economic slowdown is gathering pace.
At 9.57am the FTSE 100 was down 90.28 or 1.38% to 6,451.
Overnight, copper prices fell 6% to below $2.50 a pound, a level not seen since 2009. Given the ubiquitous use of copper, ranging from household appliances to construction, the metal is often seen by traders as a proxy for the state of the world economy.
The big fall in copper prices triggered concerns over the outlook for the world economy worries reinforced by the World Bank late on Tuesday when it downgrading its growth forecast for the global economy to 3% in 2015 down from its earlier 2015 forecast of 3.4%.
For the troubled euro economies alone, the Bank has slashed its estimate for 2015 growth from 1.8% to 1.1%.
The World Bank believes the strengthening of the US economy and retreating oil prices will not be sufficient to offset weak confidence among consumers and businesses, and the inability of big central banks to cut interest rates below their record-low levels to boost inflation expectations.
Mining stocks were down heavily in early action, with the likes of Antofagasta down 10.4%, Glencore off 9% and Vedanta Resources sliding 13.3%.
Elsewhere on the corporate front, luxury fashion group Burberryslipped after it revealed a strong third quarter performance, but cautioned it was experiencing falling sales in the high-margin market of Hong Kong.
Housebuilder Barratt Developmentsedged down 0.12% after reporting strong interims for the period to December. It assured it is on track for another "significant improvement" for the full year.
More broadly, investors are continuing to bet that the European Central Bank will announce fresh stimulus measures next week.
The chances of that increased this morning after the European Court of Justice ruled that the Bank's controversial Outright Money Transaction programme is legal, paving the way for the Bank to launch QE programme.