FTSE 100 falls in Christmas Eve trading after Wall Street selloff dashing hopes of a Santa rally

The FTSE 100 has fallen in Christmas Eve trading as Wall Street troubles dash hopes of a late Santa rally.

The blue chip index dropped 0.8 per cent in early trading at the beginning of a half-day session.

A partial US government shutdown, trade tensions between the US and China and reports President Donald Trump was considering firing Federal Reserve chairman Jerome Powell ensured last week’s selloff continued today.

It also comes after the Fed raised interest rates and committed to two further hikes in 2019.

Dragging down the UK's main index were companies that have a greater international presence, with Imperial Brands dropping 2.6 per cent and British American Tobacco 1.3 per cent lower.

Advertising giant WPP was one of the index’s sharpest fallers, sliding 2.7 per cent.

“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,” Accendo Markets analyst Michael van Dulken said.

“This is on top of pre-existing trade war fears with the US Trade Secretary saying ‘All auto tariff options still on the table’.”

On Friday the Nasdaq fell three per cent on another volatile day’s trading and has now fallen almost 22 per cent from its 29 August high – sliding into bear market territory.

The S&P 500 dropped 2.1 per cent and is now on track for its biggest percentage decline in December since the Great Depression and the Dow Jones slid 1.8 per cent, to its lowest level since October 2017.