The FTSE 100 lost 119 points shortly after the open, dropping 1.6 percent and sending it to 6,646 points as a sea of red washed over the European stock market. As of 09:30 GMT, the UK stock index had clawed back up slightly but was still down 70 points to 6,695.83. Today’s decline puts UK indexes on track for their worst year since the 2008 financial crisis. The pan-European STOXX 600 opened 1.5 percent down.
At the same time of trade, the German DAX had lost 117 points, down 1.0 percent.
In Paris, the CAC 40 had dropped 66 points, a loss of 1.4 percent, and the Spanish IBEX 35 was down 102 points, or 1.1 percent.
The shockwaves through the European stock market come after the Federal Reserve raised rates for the fourth time in 2018.
The Fed raised key overnight lending rate rates by 0.25 percent point as expected to a range of 2.25 percent to 2.50 percent.
As well as rattling global stocks, the move went against calls from US President Donald Trump, who had urged the central banking system to stop raising rates.
Wall Street stocks were hit by the news, with the Dow Jones tumbling to its lowest level of the year by closing down 352 points, or 1.5 percent.
The S&P 500 ended the trading day in negative terratory, down 1.5 percent, while the Nasdaq lost 2.2 percent.
Jorge Mariscal, emerging markets chief investment officer at UBS Global Wealth Management, said: “People are worried about growth and to hear the Fed isn’t (worried) concerns the market.
“In turn, that supports the U.S. dollar and that is negative news for emerging markets in general.”
Over in Asia, Hong Kong shares ended lower after the city’s de facto central bank raised its base rate in line with the Fed.
The Hang Seng index was down 241.86 points or 0.94 percent at 25,623.53.
The Hang Seng China Enterprises index fell 1.03 percent to 10,090.75.
MSCI’s ex-Japan stock index was weaker by 1.02 percent, while Japan’s Nikkei index closed down 2.84 percent.
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