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Britain’s blue-chip equity index entered “bear market” territory on Wednesday after falling more than 20 percent from its record highs in April, with concerns about a slowdown in China triggering a sharp decline in commodities-related stocks.

The benchmark FTSE 100 index was down 3 percent at 5,700.05 points by the middle of the trading session after dipping as far as 5,689.48, its lowest level in more than three years.

“The FTSE is now in a bear market and should we close below 5,700, a psychological level in itself, we may well see the 5,620 level and even sub-5,600 in a very short time,” said Brenda Kelly, an analyst at London Capital Group.

“It’s not a pretty sight with every single sector in the red,” she added.

Technical analysts define a “bear market” as one in which the index falls more than 20 percent from its previous peak.

UK mining and energy indexes slumped more than 4 percent to their lowest levels in about 12 years, with a sharp decline in oil and metals prices scaring investors away from commodities stocks.

Shares in commodities-related companies such as BHP Billiton, Anglo American, Glencore and Royal Dutch Shell fell 6.3 percent to 7.8 percent.

“We do not see any lasting potential for these sectors to outperform and believe any recovery might be short-lived,” said Christian Stocker, equity strategist at UniCredit.

“The trend of earnings estimates is declining strongly, relative valuation versus the overall market is still very high and a lasting trend reversal in commodity prices is not in sight. We recommend remaining underweight on commodity stocks.”

BHP Billiton came under further pressure after saying it expected no recovery in iron ore or coal prices in the next few years, with global markets suffering from oversupply and a slowdown in China, the world’s biggest metals consumer.

Among mid-caps, pub chain operator J D Wetherspoon plunged 8 percent and was set for its biggest daily loss since 2010 after the company warned that 2016 profits would be at the lower end of analysts’ expectations.


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