Friday market close: Stocks hit nine-month low on China

Global markets have been spooked in recent weeks by China's slowing economy. Picture: Getty
Global markets have been spooked in recent weeks by China's slowing economy. Picture: Getty
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The FTSE 100 index suffered its largest one-day fall since last October as renewed fears over China saw the top-flight extend its recent run of declines.

Dismal manufacturing figures from the world’s second-biggest economy saw the index tumble 180.24 points, or 2.8 per cent, to 6,187.65, a nine-month low.

It means the FTSE 100, which has now endured nine days of losses, has seen £92.8 billion of value removed this week alone.

Tony Cross, market analyst at Trustnet Direct, said: “It’s been a tough week for the FTSE, but right now the idea that we’ll see traders dust themselves down on Monday and start buying again is difficult to believe. Bargain hunters may elect to remain side-lined for a while yet.”

The decline came after Wall Street saw its worst session in 18 months on Thursday while there was another steep drop of 4 per cent for Shanghai’s Composite Index.

Global markets have been spooked 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 per cent down from its all-time high of 7,104 in April.

Latest fears over China came 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.

In London, technology firm Arm Holdings, which designs chips to power Apple products, was among the fallers, down 3.6 per cent after a note from brokers at Liberum cut forecasts for earnings. Analysts said: “Arm is still a smartphone play and this market is slowing sharply.” Shares fell 32.5p to 864.5p.

Royal Mail was the only top-flight riser, gaining 7.5p to close at 478.2p.