Global sell-off ramps up as Trump calls rate hikes ‘crazy’

London’s blue chip share index has nosedived another 1.7% lower amid a painful global sell-off as US President Donald Trump hit out at “crazy” US interest rate hikes.

The FTSE 100 Index tumbled 118.2 points to 7027.5 in midday trading, taking it to a new six-month low.

It follows the biggest drop overnight on Wall Street in eight months, with a decline of more than 830 points on the Dow Jones Industrial Average, which sparked hefty losses across Asia.

Further declines are expected on the Dow later, with the futures market pointing to another bloody session.

Investors have been sent heading for the exit on concerns over rising US bond yields, with the US’s massive borrowing looking vulnerable given the costs of servicing the debt.

Mr Trump dismissed the rout as a long-overdue correction, but told reporters the US Federal Reserve was “crazy” for hiking interest rates too fast.

But markets have also become jittery over mounting trade tensions between the US and China, which could hit global demand.

Connor Campbell, financial analyst at Spreadex, said: “The European open was a proper, old-fashioned bloodbath, reminiscent of the drastic sell-off seen back in February.”

Michael Hewson, chief market analyst at CMC Markets, added: “US markets look set to pick up where they left off last night in the wake of today’s continuation of selling pressure with further losses looking likely.”

In London, housebuilders were among those bearing the brunt of the sell-off, with Barratt Developments 11% or 59.8p off at 495.5p in the FTSE 100.

Retailer WH Smith was a big casualty in the FTSE 250 Index – down 13% or 256p at 1778p after it unveiled an overhaul of its under-pressure high street business after revealing sliding sales and profits at the division.

One-off costs of the review sent group pre-tax profits down 4% to £134 million for the year to August 31.

But with these costs stripped out, underlying pre-tax profits rose 4% to £145 million thanks to another impressive performance from its travel business.

Defensive stocks, including gold and silver miners, were among a shortened list of top tier risers, with Fresnillo ahead 6% or 44.5p to 816.7p.