The FTSE 100 has dropped in Christmas Eve trading as the troubles of the Wall Street thwart the hopes of a late Santa rally.
The blue-chip index fell by 0.8 percent in early trading at the start of a half-day session.
A partial shutdown of the government of the United States of America, the trade dispute between China and the US, and the reports that US President Donald Trump was considering the dismissal of Jerome Powell, the chairman of the Federal Reserve, ensured that the selloff of last week continued last Monday.
The drop also comes after the Federal Reserve raised the interest rates and committed to two further increases in the coming year.
Dragging down the main index of the United Kingdom were firms that have a greater international presence, with Imperial Brands falling by 2.6 percent and British American Tobacco dropping by 1.3 percent lower.
WPP, an advertising giant, was considered as one of the sharpest fallers of the index, after sliding down by 2.7 percent.
Michael van Dulken, one of the analysts at Accendo Markets stated: “Markets are still under pressure from last week’s more hawkish Fed update, exacerbating fears about slowing growth and more expensive refinancing following years of stimulus.”
He added: “This is on top of pre-existing trade war fears with the US Trade Secretary saying ‘All auto tariff options still on the table’.”
Last Friday, the Nasdaq dropped by three percent on yet another volatile day’s trading and has now plunged by nearly 22 percent from the high that was recorded on the 29th of August – slipping into the bear market territory.
The S&P 500 plummeted by 2.1 percent and is currently on track for its biggest percentage drop in December since the Great Depression and the Dow Jones dropped by 1.8 percent, to its lowest level since October of the previous year.