FTSE 100 tumbles 2.2% in New Year session as China suspends trading
Shanghai Composite index plummets 7%
The FTSE 100 suffered a tough start to 2016 today, following the suspension of trading on China's Shanghai Composite index as shares plunged 7% in the first session of the year.
The UK's blue-chip index was down to 6,106 by 11.40am as a new system in China, introduced to curb volatility after last August's Black Monday sell-off, led trading to be initially halted for 15 minutes after the stockmarket fell by 5%.
However, shares continued to drop and regulators then ended trading early, according to the BBC. The index closed down 6.9% to 3,296.66.
It was subsequently followed by other Asian indices such as the Hong Kong Hang Seng, down 2.8%, and the Nikkei 225, which closed 3.1% lower.
Other European indices have also suffered a difficult start to 2016, with Germany's Dax down 4.2% to 10,289, its biggest drop since Black Monday, which saw it fall 4.7%. Meanwhile, France's CAC 40 has also fallen 2.7% to 4,511.
China's stockmarket tumble has been partly attributed to growing concerns about the strength of its economy, following the release of more weak manufacturing data last week.
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On the FTSE 100, just three stocks posted positive moves this morning. Resources company Randgold Resources was up 2.3%, while travel companies TUI and easyjet rose 0.5% and 0.75% respectively.
The biggest losers were Anglo American, down 6.4%, after selling a large coal mine to Australian Pacific Coal, and Glencore, which fell 5.5%.
Sanjiv Shah, chief investment officer at Sun Global Investments, commented: "The New Year has started with Asian and European stockmarkets sharply lower.
"The Shanghai Composite index fell sharply and trading was halted briefly. It is currently trading 6.9% lower.
"The Chinese markets have fallen after data showed manufacturing weakened for the fifth month in a row.
"The Caixin China Manufacturing Index for December fell to 48.2 which, being below 50, indicates contraction and underlines the continuing evidence of weakness in the manufacturing sector.
"Chinese stocks are also weak as markets anticipate the likely lifting of the ban on short selling which is due next week. China's weakness has affected other indices in Asia with most markets down about 2% this morning."
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