UK stocks tumble as concerns grow over febrile global markets

TSE 100 slumps 2.6% to 7,141 to wipe all gains on year’s trading but New York recovers late on

Shares in London plunged for a sixth day and by the largest amount since the Brexit vote as concerns grew that febrile global stock markets, which have lost $4tn (£2.9tn) in value since Friday, were in the grip of panic-selling.

The FTSE 100 slumped 2.6% to 7,141 to wipe out all the gains from this year’s trading and set the index of Britain’s most valuable companies on course for a second week of losses. Investors took fright elsewhere in Europe, with markets in Germany, France and Spain all closing down by more than 2%.

Stocks also tumbled across Asia earlier in the day. The Tokyo Nikkei 225 index was among the worst affected after shares fell by more than 4% to 21,620, leaving them 12% down on last month’s peak of 24,120.

In New York high-volume trading led to a volatile day. The Dow Jones industrial average ended the day closing up 567 points, or 2.3%, at 24,912. At its lowest point, the index was down 567 points. After two huge sell-offs in succession the result restored a measure of calm.

The US Treasury secretary, Steven Mnuchin, said he was not “overly concerned about the market volatility. I think the fundamentals are quite strong.”

The White House press secretary, Sarah Sanders, also dismissed concerns that the performance reflected any weakness in the US economic picture. “There’s nothing that’s taken place over the last couple of days in our economy that’s fundamentally different than it was two weeks ago and we’re very comfortable with where we are right now,” Sanders said.