Glencore shares slump to record lows

Shares in Swiss trader and producer Glencore fell to a new intraday low of 107 pence a share, down more than 9% on the day, making it the worst performer in the U.K.’s FTSE 100 index. The company’s price later climbed above GBP1. The copper price, Glencore’s largest earnings driver, led the base metals complex lower in afternoon European trading, falling 2.9% to $ 5,103 a ton. The beleaguered company’s shares recovered slightly but closed down 10%. The miner entered the index to much fanfare in 2011 with a share price of 530p in the largest ever IPO on the premier segment of the London Stock Exchange. The Fed’s decision sparked renewed fears over the sluggish pace of global growth and has left investors second-guessing when the first rate move will come.

In London, mining stocks were punished on the back of a downgrade by analysts at Credit Suisse relating to the economic slowdown in China and other emerging markets.

In New York the Dow Jones Industrial Average was down over 200 points in early trading.

As share and metals prices plummet, mining companies are increasingly responding by slashing costs. The world’s biggest mining company reported a 52 percent drop in underlying full-year earnings last month, highlighting its challenges as Chief Executive Officer Andrew Mackenzie seeks to trim capital spending.

Glencore has become a symbol for investor jitters around Chinese demand. For Johnson Matthey, Carsten Menke, commodities research analyst at Julius Baer, noted that the Volkswagen scandal hurt the platinum market on Tuesday due to fears that German vehicle manufacturer’s diesel disaster could weigh on demand for automotive catalysts.

However, the company added that the outlook for John Crane is tough and said its results in the current financial year will be more weighted to the second half than normal. The initiatives are part of a wider $10 billion debt-reduction plan created to help it protect its credit rating amid the price rout that’s eroding profits at all of the biggest mining companies.

“We think funds focused on more domestically skewed businesses should prove relatively more defensive, but are unlikely to be immune from indiscriminate selling”.

An analyst at Noah Capital Markets said the loss of share price value on the local stocks was baffling, particularly as there had been no prior indication of the direction the markets would take today. “This feels more technically driven than fundamentals [driven]”, he noted.