London stocks were set for heavy losses on Thursday following a massive selloff in the US and Asia amid growing concerns about rising interest rates and trade tensions between the US and China.
The FTSE 100 was called to open 103 points lower at 7,042.

Stocks on Wall Street suffered their worst losses on Wednesday in eight months, with the Nasdaq ending down 4.1% , the Dow 3.2% lower and the S&P 500 down 3.3% as worries about higher US rates, political uncertainty in Italy and increasingly sour US-China trade relations sparked heavy selling.

Meanwhile, the VIX, which is known as a fear gauge, hit its highest level since April.

London Capital Group analyst Jasper Lawler said: “The bloodbath for global equities comes as investors adjust to a world of higher US interest rates and US treasury yields. As concerns increase over higher interest rates dampening growth, investors are evolving their trading strategies accordingly.

“Plays into risker growth stocks, such as tech stocks on the Nasdaq, are being replaced with more conservative strategies such as moves into higher yielding defensives. To say risk appetite has taken a hit would be an understatement! Riskier growth-based assets are off the menu and havens are being gobbled up.”

Speaking to reporters before a political rally in Pennsylvania, US President Trump said of Wednesday's selloff: “Actually it's a correction that we've been waiting for a long time, but I really disagree with what the Fed is doing.”

He added: “I think the Fed has gone crazy.”

In UK corporate news, paper and packaging group Mondi said higher average selling prices across fibre packaging and uncoated fine paper, a very strong operational performance, good cost containment and contributions from recent acquisitions boosted third quarter underlying EBITDA by a third to €466m (£407m) year-on-year.

Hargreaves Lansdown reported an uncertain market environment and weak investor sentiment in the past three months yet still grew assets under administration 2.7%. In what was the first quarter of its financial year, the investment and pensions platform won £1.3bn of net new business as it welcomed 29,000 new clients.

Homewares retailer Dunelm said revenues had grown 4.2% on a like-for-like basis in the first quarter of its financial year. Including the benefit of changes to the store portfolio, total growth of continuing business was 5.8%.

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