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 About 3.5 billion pounds ($5.33 billion) in market value was wiped
off the firm, which is in the middle of a drive to sell assets and
raise cash to help cut its $30 billion debt pile and protect its
credit rating after a crunch in prices of its main products, copper
and coal.
The fall spread to the broader UK mining sector, which has also felt
the pain from an emerging-markets slowdown and a crash in
commodities prices. The FTSE 350 mining index sank to its lowest
level since Dec. 2008.
Traders cited a Investec note that raised doubts over Glencore's
valuation if spot metal prices did not improve. The note pointed to
high debt levels and a need for deeper restructuring.
"If major commodity prices remain at current levels, our analysis
implies that, in the absence of substantial restructuring, nearly
all the equity value of both Glencore and Anglo American could
evaporate," analysts at Investec wrote.
Glencore declined to comment.
Shares of Glencore were down 23 percent at 75.01 pence at 1028 GMT
after falling as much as 27 percent to a record low of 70.66. The
stock is down around 75 percent year-to-date.
Anglo American shares were down 7.9 percent.
The outlook for China's economy was also a drag on markets, with
forecasts pointing to a likely shrinking of the country's giant
factory sector for the second month in a row. Profits earned by
Chinese industrial companies declined at the sharpest rate in four
years in August, according to official data.
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Brewin Dolphin analyst Nik Stanojevic said investors were likely
pricing in a fresh drop for metals and commodities prices.
News that Glencore had sold a nickel project in Brazil to Horizonte
Minerals for $8 million offered little respite, with Hobart Capital
Markets' Justin Haque saying the price was a fraction of what
Glencore had spent.
Traders warned that the stock might fall even further if more assets
were put on the block.
"The market is concerned that there is going to be a fire-sale going
on at Glencore," said Beaufort Securities' sales trader Basil
Petrides.
"I don't think anybody knows where the floor is on the stock at the
moment."
(Reporting by Lionel Laurent; Additional reporting by Olivia
Kumwenda; Editing by)
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