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| FTSE 100 falls sharply at start of new year | |
| (about 1 hour later) | |
| (Open): UK shares fell sharply in the first session of the new year, as steep losses in Chinese markets affected trading in Europe. | (Open): UK shares fell sharply in the first session of the new year, as steep losses in Chinese markets affected trading in Europe. |
| The FTSE 100 was down 113.77 points, or 1.8%, at 6,128.55, while in Germany the Dax index fell more than 3%. | |
| Earlier in Asia, trading in China had been suspended after markets fell 7%, triggering new "circuit breakers" designed to limit volatility. | |
| One factor behind the fall was another weak manufacturing survey. | |
| The Caixin/Markit manufacturing purchasing managers' index (PMI) slipped to 48.2 in December, marking the 10th consecutive month of shrinking factory activity in China. A figure below 50 indicates contraction. | |
| The survey hit shares of mining companies in London, as China is a major importer of raw materials. Shares in Anglo American fell 7% while Glencore was 5.9% lower. | |
| Confidence among investors was also hit by worries over rising tensions in the Middle East, with Saudi Arabia breaking off diplomatic ties with Iran. | |
| On the currency markets, the pound fell 0.5% against the euro to €1.3506, but rose 0.14% against the dollar to $1.4757. |