London's FTSE 100 falls after US recession fears spark global sell-off

Friday's data showed a sharp slowdown in US job growth, raising fears of deterioration in American labour market and potential recession, prompting bets for a half-point interest rate cut in September

The UK's main stock indexes kicked off the week on a downbeat note, led by losses in utilities as fears of US recession mounted after weak economic data sparked a global sell-off.
 

The blue-chip FTSE 100 index fell 2.0 per cent to its lowest since April 22 and clocked its worst day in over a year. The mid-cap FTSE 250 index was off 2.8 per cent after falling to its lowest level in more than three months.
 

Friday's data showed a sharp slowdown in US job growth, raising fears of a deterioration in the American labour market and a potential recession, prompting bets for a half-point interest rate cut in September by the Federal Reserve to prevent a slowdown.
 

"US macro data has been surprising to the downside for quite some time, and the labour market data on Friday was kind of a wake-up call where suddenly a lot of investors realized that the US economy is slowing down," said Joachim Klement, research analyst at Panmure Liberum.
 

All sub-sectoral indexes in London ended in the red.
 

Water utilities were the worst hit with a 4.0 per cent decline, after Barclays said it was no longer positive on the sector and downgraded ratings on companies like Severn Trent and Pennon.
 

Worries of a US recession also hit the oil markets, with energy shares finishing lower at 3.2 per cent.
 

Precious metal miners closed 3.3 per cent lower as gold prices fell on wider market sell-off.
 

Meanwhile, a survey showed that domestic services companies reported an influx of new orders and the biggest rise in employment for over a year during July.
 

Separately, the Institute for Supply Management (ISM) report showed that services sector activity in the US rebounded from a four-year low in July, which could help assuage fears of a recession.
 

John Wood Group fell over 35.0 per cent to the bottom of the FTSE 250 after Dubai's Sidara said it was walking away from its plan to buy the British oilfield services and engineering firm.

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