The FTSE 100 fell to its lowest point since 17 April today, closing at 6,636.2 - 46.3 points lower than yesterday.
This decline of 0.7 per cent follows disappointing economic data for the UK and Europe: two areas from where British blue chips get around half of their sales.
Figures from the Office for National Statistics showed that the UK's manufacturing output went up by 0.3 per cent in June, although this was an improvement on the 1.3 per cent drop in May, it was half of the 0.6 per cent rise that investors had been expecting.
Outside of the UK, Italy unexpectedly slid into recession in the second quarter and German industrial orders fell short of forecasts.
"The European equity indexes had been moving ahead of events," Chris Hiorns, fund manager at Ecclesiastical, said.
"The economy recovery that this bull run in equities was based upon is not really that evident, and that has hurt sentiment."
An escalation of tensions over the Ukraine crisis has also contributed to the index's poor performance, after Poland's Prime Minister Donald Tusk warned this morning that the risk of a Russian invasion of Ukraine has risen in the past few days.
Yesterday, Nato said that Russia has increased the number of troops positioned on its border with Ukraine to 20,000, compared to last week's figure of 15,000.
"As the tensions mount, we'll see more of a correction on the equity markets. The mentality now is not to buy on dips but to sell on rallies," said Securequity sales trader Jawaid Afsar.
Additionally, eight British blue chips went ex dividend today. This knocked 14 points off the FTSE 100.
Reported by City A.M. 3 hours ago.
This decline of 0.7 per cent follows disappointing economic data for the UK and Europe: two areas from where British blue chips get around half of their sales.
Figures from the Office for National Statistics showed that the UK's manufacturing output went up by 0.3 per cent in June, although this was an improvement on the 1.3 per cent drop in May, it was half of the 0.6 per cent rise that investors had been expecting.
Outside of the UK, Italy unexpectedly slid into recession in the second quarter and German industrial orders fell short of forecasts.
"The European equity indexes had been moving ahead of events," Chris Hiorns, fund manager at Ecclesiastical, said.
"The economy recovery that this bull run in equities was based upon is not really that evident, and that has hurt sentiment."
An escalation of tensions over the Ukraine crisis has also contributed to the index's poor performance, after Poland's Prime Minister Donald Tusk warned this morning that the risk of a Russian invasion of Ukraine has risen in the past few days.
Yesterday, Nato said that Russia has increased the number of troops positioned on its border with Ukraine to 20,000, compared to last week's figure of 15,000.
"As the tensions mount, we'll see more of a correction on the equity markets. The mentality now is not to buy on dips but to sell on rallies," said Securequity sales trader Jawaid Afsar.
Additionally, eight British blue chips went ex dividend today. This knocked 14 points off the FTSE 100.
Reported by City A.M. 3 hours ago.