UK shares near 6-month low as investors concerned over trade tensions

UK shares fell to their lowest since April as a global rout on equity markets caused by fears of fast-rising rates and risk aversion amid a burst of volatility took its toll in Europe after hitting Asia and Wall Street.

The FTSE 100 fell 1.4 per cent by 0839 GMT, a fall broadly in line with European benchmarks, all retreating after the S&P 500 and the Nasdaq plunged in New York overnight.

"The bloodbath for global equities comes as investors adjust to a world of higher US interest rates", said Jasper Lawler from London Capital Group, explaining that investors were switching bets on so-called growth stocks, like America's Facebook or Amazon to "more conservative strategies".

"To say risk appetite has taken a hit would be an understatement", he added.

Recruiting firm Hays posted the worst performances of the pan-European STOXX 600, sinking 12.7 per cent, after reporting a slower quarterly fee growth rate, hurt by a relatively stronger pound against other foreign currencies.

British fund supermarket Hargreaves Lansdown was also among the big losers of the day, retreating 4.8 per cent after a trading update which suggested a slower start to the financial year.

Books, newspaper and stationery retailer WH Smith took a big hit, down 10.4 per cent, after it unveiled plans to restructure its high street business to face lower consumer spending and lingering economic uncertainties.

Oil majors also contributed to dragging the index down as oil fell to two-week lows with prices also hit by the storm on Wall Street and an industry report showing U.S. crude inventories rose more than expected. BP lost 2 per cent and Royal Dutch Shell 2.2 per cent.

Losses were exacerbated by the fact that a number of stocks, such as Barratt Develoment, Centrica, HSBC and Tesco, were trading without entitlement to their latest dividend payout.