At the close: FTSE 100 slides as Rolls-Royce plummets
The FTSE 100 index fell in Thursday's trading after Rolls-Royce shares tanked and miners continued to slide.
The UK's top blue-chip index fell 1.88 per cent to 6,178 points.
Rolls-Royce was the biggest casualty of the day, tumbling 19.57 per cent to 536.5p after warning profits will be at the lower end of expectations due to "sharply weaker demand". The company said that profit headwinds in 2016 are likely to increase to £650m, thanks to falling demand for its wide-bodied aftermarket, corporate and regional aerospace markets and offshore marine arm.
Read more: Rolls-Royce share price tumbles
Miners extended their run of loses, with shares in Anglo American, Glencore, BHP Billiton, Antofagasta and Rio Tinto all down.
Anglo American shares fell 8.7 per cent to 449.9p per share, while Glencore's stock slid 7.64 per cent to 95.92p. BHP Billiton and Antofagasta fell 5.02 per cent to 877.3p per share and 4.89 per cent to 480.8p per share respectively.
Rio Tinto fell less sharply by 2.99 per cent to 2,238p per share.
Earlier, copper prices slid to a two-and-a-half month low after the dollar rose to effectively make it more expensive. Chinese loan data which was also significantly weaker than expected. China is the largest metals consumer, accounting for nearly half of global copper demand.
Read more: FTSE miners tumble as commodities rout deepens
"The underlying commodity prices that are driving down commodity-linked stocks [are] … driven by concerns over China [and] a stronger dollar,” Fawad Razaqzada, analyst at City Index, said.
Shares in Sainsbury's also fell 4.07 per cent, a day after it reported a nearly 18 per cent fall in profit, despite slashing its interim dividend by a third. "Cost inflation, selling deflation, and gross margins under pressure suggest on-going, structural profit declines," HSBC analysts wrote in a note.
However, BAE systems' share price rose 3.81 per cent to 455p per share, rebounding after sources told Reuters that it was in talks to sell its US manpower and services businesses to a private equity firm for more than $1bn (£0.65bn).