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Shares in London open higher despite further massive falls in China Europe shares open higher despite further massive falls in China
(35 minutes later)
London shares rebounded at the start of trading, despite another night of steep falls for the Chinese stock market. Shares in London and elsewhere in Europe rebounded at the start of trading, despite another night of steep falls for the Chinese stock market.
The FTSE 100 rose 1.5% to 5,989, after Chinese stocks lost another 4%, extending their worst fall since 2007. The FTSE 100 rose 1.6% to 5,994.11, while Germany's Dax and Paris Cac were both up about 1.4%.
Japanese shares were also sharply lower again with Tokyo's Nikkei index, closing 4% lower although other Asian markets rebounded. The gains came after Chinese stocks continued their run of big losses.
The global sell-off is being driven by fears that China's slowing growth might pull down other economies. The main Shanghai Composite index closed down 7.6% at 2,964.97 points. Japan also saw more sharp falls and Tokyo's Nikkei index was 4% lower.
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The global sell-off is being driven by fears that China's slowing growth means less business for everyone else.
China's booming economy of the last 30 years has seen the country suck in supplies of raw materials for manufacturing and, increasingly, manufactured and luxury goods from other countries.
Read more from our experts:
Andrew Walker: How the China share slump affects the rest of the world
Karishma Vaswani: China counts cost of Black Monday
Robert Peston: Will China’s slowdown make us poorer?
Duncan Weldon: China share falls - why it's not 2008
After decades of rapid growth, China is running out of steam. Investors globally are worried that firms and countries that rely on high demand from China - the world's second-largest economy and the second-largest importer of both goods and commercial services - will be affected.
But although the slowdown in the Chinese economy will have a bearing on Chinese firms' profitability, many view the stock market as grossly inflated.
The main Shanghai index more than doubled in the 12 months up to mid-June.
Capital Economics said investors had been "overreacting about economic risks in China", arguing that "the collapse of the equity bubble tells us next to nothing about the state of China's economy".
The government, which has both money and the power to influence what are not free markets, has taken steps to lower the value of the yuan in order to boost demand for Chinese goods oversees, and has also intervened in the stock market to support values.
Although very few Chinese people own shares - only around 2% of the population - they are extremely active on its stock market. They are responsible for the majority of daily turnover and the government is trying to ameliorate the impact of the trading rout on those individuals.
Many bought shares with borrowed money, and as those investors fall in value, they are now selling investments to pay back.