Growing Brexit fears send pound and FTSE tumbling
More than £30 billion has been wiped off the FTSE 100 Index as mounting Brexit fears sent the London market into meltdown.
The pound fell further and Britain's blue chip share index tumbled below the 6,000 level for the first time in nearly four months as the latest polls suggested record support for Brexit.
The latest plunge means more than £70 billion has now been lost from the index since the start of the week.
The London market was more than 2% lower after hefty falls in the previous session, while the pound dropped 0.8% to 1.41 dollars after hitting two-month lows against the US dollar and euro on Monday.
The market and currency woes come after three opinion polls on the EU referendum put the leave campaign in the lead, while the Sun newspaper came out in favour of Brexit.
According to a poll of polls, support for Brexit is now at its strongest since records began last year.
The referendum jitters have spread to markets worldwide as share prices dropped sharply ahead of the EU referendum, with falls compounded as oil prices fell once more and amid renewed concerns over the global economy.
With this week's US interest rate decision also in sharp focus, the Dow Jones was down 0.66%, while the Cac 40 in France sank by 2.17% and Germany's Dax fell 1.28%.
Sliding oil prices have hit stocks further, with benchmark London Brent crude 1.5% lower at 49.60 US dollars as a report pointed to an increase in US shale production next year.
Connor Campbell, financial analyst at Spreadex, said the hefty equity falls reflect the "stranglehold the EU referendum has started to have on the markets".
Lower-than-expected UK inflation figures also did little to support sterling, with the Consumer Prices Index remaining unchanged at 0.3% in May against forecasts for a rise to 0.4%.
Among stocks in the red, Barclays was under pressure after a report from analysts at Jefferies suggested it was the UK bank that would be hit hardest by a vote to leave the EU, sending shares down more than 3%.
The lender is thought to be the most exposed through its investment and corporate banking.
Housebuilders were also suffering falls, despite Crest Nicholson brushing aside concerns over the EU referendum and posting a 25% rise in pre-tax profits to £72.6 million for the first half of the year.
It admitted there would be a risk of "disruption" following a Brexit vote, but insisted there was still strong demand from house buyers.
Shares in Crest fell 7% in the FTSE 250 Index, while its top tier rivals were also heavily lower with Berkeley off 4% and Barratt Developments and Taylor Wimpey both more than 3% lower.