Shares in London hit a fresh three-month low on Tuesday as Brexit worries swept through the City, wiping £30bn off the value of blue-chip companies.

The FTSE 100 index closed down 121 points at 5923, its lowest level since late February, and its fourth day of heavy falls. Across the continent investors suffered a similar fate as shares plunged on most bourses, taking losses on the Eurostoxx 600 over the last five days to €600bn.

The pound also tumbled 1.2% to below $1.41, its lowest for two months, and the price of a barrel of oil fell $1 as concerns over the global economy sent investors rushing for havens.

The FTSE index of top shares has now shed 378 points since last Wednesday, when Brexit fears began to mount on polls showing the leave campaign taking an unexpected lead.

A survey by TNS consolidated fears that Britons will vote to quit the EU after it said leavers had a seven-point lead over those who want to remain. This came after a Guardian/ICM poll earlier in the week that gave the leave campaign a six-point lead.

Mining shares were among the top fallers, reflecting fears that a demand for metals will decline in response to waning demand from a European economy hit by Brexit uncertainty



Housebuilders such as Taylor Wimpey and Barratt Developments also saw their value tumble after analysts said they would be hit by a decline in the UK housing market if the Bank of England raised interest rates to prop up sterling.

The pound has fallen by more than 12% since last November and could fall by anything between 15% and 30% after a vote to leave the EU, according to a range of economic forecasts.

Mark Dampier, research director at the stockbroker Hargreaves Lansdown, said: “The stench of Brexit is stalking the streets of the City. The market is now at levels last seen in February, when the vote was announced. Back then the FTSE 100 bottomed at 5536.97. Given the opinion polls, the dramatic change seen in the betting odds and low sentiment in general towards world stockmarkets it seems quite possible we could see further falls as an increasing probability of Brexit is being priced in.”

Joshua Mahony, market analyst at IG, also said fear was gripping the markets – driving money into safer investments such as German bonds.

“Yet another day in the red for European markets has seen fears surrounding a potential Brexit continue to restrain risk appetite. The flight to safety is clearly evident in the foreign exchange markets, with money moving out of European currencies and into distant havens such as the yen and dollar,” he said.

EU referendum: leave takes six-point lead in Guardian/ICM polls Read more

The yield on 10-year German bonds turned negative for the first time and the borrowing rate on British government bonds reached an all-time low. The yield for countries vulnerable to a Brexit suffered the opposite, with yields on 10-year Portuguese, Irish, Greek and Italian bonds up, increasing their borrowing costs and widening the gap between Europe’s core and the periphery.

“Yet another EU referendum poll has hammered home the increasing threat of a Brexit next week, with the TNS poll coming out heavily in favour of the UK leaving the EU today. What initially looked like an anomaly, has turned into the norm, with eight of the last 10 polls coming out in favour of a Brexit,” Mahony said.

The prospect of Europe being thrown into political crisis, as the EU president, Donald Tusk, hinted on Monday, has “added fuel to the fire” for nervous investors, said Jasper Lawler, an analyst at CMC Markets.

“Markets are already worried about slowing global growth and the inability of central bank policy to stem the decline. The 23 June EU referendum gives a specific date when all the market’s troubles could come to a head,” he said.

“Shares and the pound are being shunned in favour of havens like German and British bonds, the yields of which have struck record lows. Expectations of weak global growth and ever-enduring easy monetary policy, likely to be reinforced at central bank meeting this week, is seeing a mass exit from equities and feeding demand for bonds, sending yields to record lows.”