The FTSE 100 is trading around a five-month low as emerging markets continue to fall and the trade war between the US and China threatens to escalate.
Uncertainty surrounding emerging markets – including Turkey, South Africa and Argentina - and the potential escalation of a trade war between the US and China has led to a decline in trading appetite, analysts said.
The index had dropped to 7,362 points this morning – a level it hasn't hit since April – before recovering slightly to 7,369 at midday.
BHP Billiton, falling 3.2 per cent, and Admiral Group, dropping 2.7 per cent, were among the biggest fallers, along with Just Eat, which slumped 3.4 per cent.
Despite the drop, the energy sector added 3.5 points to the FTSE index after energy regulator Ofgem proposed a price cap on default energy bills.
Shares in Centrica, which owns British Gas, have risen 5.6 per cent today as a result as the price cap has brought more clarity to the industry.
Clarity has been hard to come by for investors, however, with emerging markets continuing to collapse today.
The deadline for public comments on US President Donald Trump's plan to impose tariffs on a further $200bn of Chinese imports will pass later today.
Trump could impose the tariffs as soon as that deadline passes.
Connor Campbell, an analyst for Spreadex, said that with little happening in Europe, investors “are just going to have to sit and stew in this particularly unpleasant trading broth”.