Argentinian angst sinks London blue-chips

The City woke up with a hangover after Argentina’s central bank abandoned its fiscal support of the peso, causing the currency to suffer its sharpest-one day fall since 2002. The Argentine devaluation, which forced the Buenos Aires government to relax capital controls, came on top of the previous day’s disappointment for the markets at China’s poor manufacturing data, and resulted in the Footsie being unable to escape the negative sentiment.

“Spanish stocks have been hit hardest given the country’s high exposure to risk from Latin America,” said Joshua Raymond, chief market strategist at City Index.

He added that US earnings season had also failed to inspire investors with consumer stalwarts Starbucks and McDonald’s missing analysts’ forecasts, dragging the Dow down 1.19pc as London trading ended yesterday.

The gloom meant emerging markets specialist Aberdeen Asset Management was the biggest faller in the FTSE 100, shedding 24.1 – or 5.72pc – to close at 397.3p.

Even financial services group Close Brothers, which posted a bullish outlook for its full-year results, failed to shrug off the wider woes and reversed its morning gains to finish off 29p at £13.07.

Aim-listed fund manager Miton Group edged lower, losing 0.25 to 49p after announcing a £3.5m sale of its Liverpool fund management business to Sensca Investment Managers.

However, Charles Stanley enjoyed a rare bright spot as its shares added 8.5 – or 1.7pc – to 510p after reporting a £20.1bn record for its funds under management.

Cairn Energy rattled investors after it said the Indian taxman had come calling, driving its shares down 14.6 – or 5.6pc – to 247.5.

The company said Indian authorities had questioned its income tax assessments from 2007, when it owned 68pc of Cairn India. The group has since cut this holding to 10pc after selling a stake to Vedanta Resources in 2011 for $6.5bn. The threat of a protracted legal dispute also hit Vedanta, which lost 30 to close at 864p.

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