China causes market ructions as FTSE hits 31-month low
- Credit: AP
The FTSE 100 slump continued today as it fell by as much as 190 points to dip below the 6,000-mark for the first time in more than two and a half years.
It marks the tenth consecutive day of falls for the index, which has now fallen to its lowest level since January 2013 as markets continue to be spooked by China's slowing growth.
Markets in China reacted similarly earlier today, with the Shanghai Composite plummeting 8.4% to 3,211.75 points and the Hang Seng 4.9% to 21,313.28.
Global markets have been rocked in recent weeks by China's slowing economy and the depreciation of the yuan as well as plunging commodity prices and fears over the timing of the next US interest rate hike.
The worries have seen the FTSE 100 officially enter 'correction' territory more than 10% down from its all-time high of 7104 in April.
The latest fears over China boiled over last week after a key manufacturing index for the country showed the sector's decline worsening, with performance at its lowest level in more than six years.
There is also renewed anxiety over debt-laden Greece after the resignation of prime minister Alexis Tsipras, likely to prompt snap elections, created doubts over its 86 billion euro (£62 billion) bailout package.
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Richard Hunter, head of equities at Hargreaves Lansdown stockbrokers, said: 'China's contribution to a potential global slowdown has unsettled markets again this morning, with sellers pushing against an open door, exacerbated by light volumes as the City waits to return to full strength at the end of this holiday month.
'The FTSE 100 has now given up 8.5% in the year to date and, as yet, it is difficult to identify a positive catalyst to alter sentiment in the shorter term.'