The FTSE 100 Index fell 150.15 points to 5,958.86, wiping out the gains seen in the previous session when it had surged by nearly 150 points.
It came after figures showed profits at China’s major industrial companies fell 8.8 per cent in August, the latest sign of weakness in the world’s second largest economy with the disappointing update dragging UK-listed miners down.
Tony Cross, market analyst at Trustnet Direct, said: “Many may be focusing on the US jobs report at the end of the week, but with Chinese PMI data due ahead of this, plus the prospect of month-end position keeping taking a toll, there’s no real sign that this bout of volatility is going anywhere soon”.
In London shares, Vodafone was among the fallers after the telecoms giant said talks with cable firm Liberty Global over a potential asset swap had been terminated. Shares fell nearly 5 per cent, or 10.5p, to 207.2p.
Elsewhere in the top-flight, a broker upgrade from Bernstein’s Bruno Monteyne sent Morrisons higher. He said actions taken by new boss David Potts “all make sense”. With costs cut, the wider economy improving and one-off restructuring charges coming down, he argued that the group was set up for “solid” earnings growth Shares added 1.2p to 155.5p.