What was termed an “unexplained micro-flash crash” split trading down the middle on London’s markets on Tuesday as a roaring morning gave way to turbulence in the afternoon.
The FTSE 100 looked set for a strong day, rising as much as 0.9% before performing a u-turn at 12.30.
Experts were left scratching their heads as within less than 15 minutes the FTSE 100 had given back most of its gains for the day, and it continued dropping through the afternoon, finally closing down 0.7%.
The 46.64 point drop to 6923.17 keeps the FTSE at below 7,000 points, a level it breached for the first time in 14 months in April.
It was joined by several of its peers both in the UK and abroad.
“The mood of the markets as a whole soured as the day progressed, linked to an as-yet-unexplained ‘micro-flash crash’ around midday,” said Connor Campbell, an analyst at Spreadex.
In Europe Germany’s main market the Dax took the biggest brunt, falling 2.5% across the day.
The Cac in Paris dropped 0.9%.
In New York, the S&P 500 was trading down around 1.4% shortly after European markets closed, while the Dow Jones index lost 0.8%.
The worst hit shares in London included companies that have benefited from lockdowns, such as Just Eat Takeaway.com, Flutter Entertainment and Ocado.
In company news, shares in Cineworld fell 2.8% on the day that its UK rival Odeon announced plans to reopen most of its screens on May 17, the earliest opportunity under Government rules.
The opening will include social distancing precautions, with empty seats being left between groups of cinemagoers.
Frasers Group, the company behind Sports Direct and House of Fraser, said it plans to spend £60 million on buying its own shares, up to a maximum of 10 million shares.
Shares in the company jumped 5.1% on the news.
S4 Capital said that it expects a 30% jump in like-for-like revenue and gross profit this year, upgrading its previous 25% forecast.
The company said that digital advertising, its speciality, will grow by a fifth this year because of a shift to online because of the Covid-19 pandemic.
Shares rose 2% after the news.
By the end of the trading day one pound would buy 1.3888 dollars, a 0.2% drop, or 1.1554 euros, a rise of 0.2%.
The biggest risers on the FTSE 100 were Fresnillo, up 27.8p to 851.4p, Polymetal, up 46.5p to 1542p, BP, up 7.15p to 310.15p, Imperial Brands, up 29.5p to 1537p, and BT, up 3p to 167.95p.
The biggest fallers on the FTSE 100 were Intermediate Capital Group, down 110p to 2076p, Ocado, down 93p to 2004p, Pearson, down 36.6p to 793.4p, 3i, down 56p to 1226p, and Aveva, down 150p to 3330p.