FTSE 100 hit by weak Chinese manufacturing data

Shares in the UK and across Europe have fallen sharply after weak manufacturing data from China raised further doubts about the strength of its economy.

A survey indicated that China's factory activity contracted at its fastest pace in three years in August.

Approaching midday, the UK's FTSE 100 index was down 134.04 points, or 2.2%, at 6,113.90.

Elsewhere in Europe, Germany's Dax index dropped 2.4%, while France's Cac 40 was 1.9% lower.

Worries about the strength of China's economy contributed to turbulent trading on the world's financial markets in August, with the FTSE 100 experiencing its worst month since May 2012.

The latest economic figures from China on Tuesday gave the markets no respite, with the official manufacturing purchasing managers' index (PMI) dropping to 49.7 from 50 in July. A figure below 50 indicates contraction.

In London, shares in mining companies suffered. China is a key importer of raw materials so any slowdown in its economy is likely to affect demand for raw materials.

Mining companies were among the biggest fallers in the FTSE 100, with shares in Glencore dropping 4.6% and Anglo American down 4%.

On the currency markets, the pound fell after the PMI survey for the UK's manufacturing sector came in weaker than expected, casting more uncertainty on when the Bank of England might begin to raise interest rates.

The pound fell nearly half a cent against the dollar to $1.5357, and dropped more than one cent against the euro to €1.3634.

(BBC)

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