LONDON (ShareCast) - The dramatic sell-off on the FTSE 100 continued into its fifth straight day on Friday as a weak finish on Wall Street and disappointing data from China hammered already-fragile sentiment on the market.
London's benchmark index was down a staggering 1.3% at 6,377 early on, dropping below the 6,400 level for the first time since late October.
The Footsie has now lost well over 5% of its value this week alone and has not closed below current levels since 27 October when it settled at 6,363.46.
US markets had started on the front foot on Thursday after a surprise acceleration in retail sales growth in November and an unexpected fall, albeit small, in weekly jobless claims.
However, ongoing downwards pressure on oil prices - West Texas Intermediate dropped below the $60-per-barrel mark to levels not seen since July 2009 - began to weigh heavily on energy stocks by the end of the day, prompting the Dow and S&P 500 to pull back sharply from their intraday highs.
Meanwhile, as CMC Markets analyst Jasper Lawler explains, improving US data has become a "double-edged sword for markets" given its potential impact on monetary policy. The Federal Reserve's next meeting is on Wednesday 17 December.
"The trouble is that when markets are largely driven by liquidity, the good news about the US economy is decreasing the timetable for how long that liquidity will last," Lawler said.
A raft of economic data was released in China overnight, and while retail sales and fixed asset investment figures were largely in line with forecast, industrial production growth slowed more than expected from 7.7% to 7.2%.
"Efforts to clean-up Beijing's air ahead of the APEC summit, which disrupted factory activity in parts of northern China last month, probably contributed to the weakness," said economist Julian Evans-Pritchard from Capital Economics.
In other economic data on Friday, investors will be on the lookout for European industrial production figures, the US producer price index and the University of Michigan index measuring US consumer confidence.
BT falls amid M&A rumours, resource stocks extend drop
Shares of telecoms giant BT were lower amid speculation that the firm will soon decide whether it wants to buy Telefonica's UK mobile network O2 or opt for Orange and Deutsche Telekom's EE.
Both O2 and EE's owners were apparently willing to accept BT shares as part of the payment in a deal that could be announced as early as Friday, according to sources cited by Reuters.
After a weak performance the previous day, stocks in the heavyweight mining sector were extending falls as commodity prices weakened. Anglo American, BHP Billiton, Glencore, Rio Tinto and Antofagasta were all registering steep declines.
Energy stocks such as Tullow Oil, BG Group, Shell and BP were also tracking the price of crude lower.
Banking stocks were also weaker, with HSBC, Barclays, Standard Chartered, RBS and Lloyds all in the red.
Utilities Severn Trent and United Utilities were higher, though SSE was lower after it was named as one of the three energy providers being fined a combined £4.6m by Ofgem for failing to meet environmental targets.
Market Movers
techMARK 2,878.20 -1.20%
FTSE 100 6,376.91 -1.31%
FTSE 250 15,437.96 -1.44%
FTSE 100 - Risers
United Utilities Group (UU.) 900.50p +3.27%
Severn Trent (SVT) 1,955.00p +2.09%
Weir Group (WEIR) 1,704.00p +0.53%
Compass Group (CPG) 1,063.00p +0.09%
FTSE 100 - Fallers
Tullow Oil (TLW) 356.30p -4.43%
Petrofac Ltd. (PFC) 692.50p -4.35%
Persimmon (PSN) 1,515.00p -3.69%
Anglo American (AAL) 1,139.00p -2.90%
Randgold Resources Ltd. (RRS) 4,143.00p -2.77%
Rolls-Royce Holdings (RR.) 810.50p -2.53%
Hargreaves Lansdown (HL.) 929.00p -2.52%
Coca-Cola HBC AG (CDI) (CCH) 1,295.00p -2.48%
Smiths Group (SMIN) 1,032.00p -2.46%
GKN (GKN) 327.50p -2.44%
FTSE 250 - Risers
Spirent Communications (SPT) 73.55p +3.30%
AL Noor Hospitals Group (ANH) 956.50p +0.68%
Just Retirement Group (JRG) 142.30p +0.57%
Pets at Home Group (PETS) 202.10p +0.55%
SSP Group (SSPG) 282.40p +0.50%
Big Yellow Group (BYG) 572.00p +0.35%
Telecity Group (TCY) 792.00p +0.19%
Bwin.party Digital Entertainment (BPTY) 109.30p +0.18%
Pace (PIC) 349.30p +0.14%
LondonMetric Property (LMP) 150.90p +0.13%
FTSE 250 - Fallers
Drax Group (DRX) 504.50p -10.63%
EnQuest (ENQ) 32.63p -8.85%
Carillion (CLLN) 323.00p -6.10%
Fenner (FENR) 201.80p -4.68%
Hunting (HTG) 483.30p -4.67%
Afren (AFR) 34.54p -4.59%
Supergroup (SGP) 799.50p -4.25%
Premier Oil (PMO) 162.10p -4.03%
Man Group (EMG) 143.30p -3.89%
Vedanta Resources (VED) 596.00p -3.72%
Email this article to a friend
or share it with one of these popular networks:
2,449.00p
Trade now with Barclays Stockbrokers
Update - 
