FTSE 100 hit three-year low as investors hunt for safety

U.K. stocks hit their lowest in more than three years Tuesday, with investors dumping so-called risk assets on worries about the persistent loss in oil prices and slowing in global growth.

The U.K’s FTSE 100 UKX, -1.00% ended down 1% at 5,632.19, the lowest close since November 2012, FactSet data showed. Mining, oil and gas and finance shares ended in the red, but consumer-service issues gained ground.

The index swerved in and out of negative territory throughout the session and dropped by as much as 1.6% before paring the decline.

“I am running out of metaphors, similes and analogies to describe the day-to-day machinations of equity markets,” wrote David Buik, market commentator at Panmure Gordon, in an online post. “Neurotic is not a strong enough adjective to describe traders’ mood. Hysterical may be too strong – perhaps somewhere in between.”

Banks: British blue-chips fell alongside the broader European equity market SXXP, -1.58% The Stoxx 600 benchmark has been dragged to its lowest since 2013, with bank stocks among the worst performing issues.

The sector is “being singled out for stress from a dangerous cocktail of slowing economic growth, more widespread use of negative interest rates, financial market turbulence, a protracted commodity market depression (notably oil) and rising bad loans (from commodity exposure) which could affect their ability to repay debt,” said Accendo Markets analysts Mike van Dulken and Augustin Eden in a note.

“European banks have spent the first part of the week hemorrhaging their market cap, while in contrast U.K. banks have fared much better,” said Alastair McCaig, market analyst at IG, in a note.

FTSE 100-listed bank shares still followed their regional peers lower Tuesday. Asia-focused Standard Chartered PLC STAN, -5.55% lost 5.5% and Barclays PLC BARC, -4.67% BARC, -4.67% ended 4.7% lower. Royal Bank of Scotland PLC RBS, -2.21% RBS, -2.68% lost 2.2%, and HSBC PLC HSBA, -1.36% HSBC, -1.76% moved down 1.4%.

A stock selloff on Monday across Europe and in the U.S. spilled over into Asian trade Tuesday, though China’s markets were closed for the Lunar New Year holiday. The session left Japanese stocks NIK, -5.40% down more than 5%, the yen USDJPY, -1.01% climbing against the U.S. dollar and the yield on Japan’s benchmark 10-year government bond TMBMKJP-10Y, -163.32% in negative territory for the first time.

U.S. stocks were lower on Tuesday.

Energy movers: Oil prices LCOJ6, -6.84% turned lower. West Texas Intermediate CLH6, -4.65% late in Europe’s trading day fell more than 3%, while Brent crude LCOJ6, -6.84% tumbled more than 5%.

London-listed oil stocks ended in the red. BP PLC BP., -2.75% BP, -3.51% fell 2.7%, Royal Dutch Shell PLC RDSB, -3.98% RDS.B, -4.56% slid 4% and BG Group PLC BG., -2.51% pushed out a 2.5% decline.

Other movers: TUI AG TUI, -1.37% shares fell 1.4% after the travel operator posted a wider net loss of 184 million euros ($199.2 million) compared with the year-ago period. The company said demand for Turkey has declined, with summer 2016 bookings down about 40%. First-quarter underlying earnings, however, rose 7.2%.

J Sainsbury PLC SBRY, -0.16% shares reversed course and slipped 0.2%. Shares had risen after the supermarket chain’s market share rose to 16.8% in the 12 weeks ended Jan. 31, according to a survey compiled by Kantar Worldpanel.

Retail stocks overall advanced after the British Retail Consortium said retail sales rose 3.3% in January. “Following on from a somewhat disappointing Christmas period for retailers, the new year kicked off to a strong start,” said Helen Dickinson, chief executive of the British Retail Consortium, in a statement. “This was the best performance for retailers since September and ahead of the three and 12-month averages.”

Source: MarketWatch