London’s top-flight dipped below the 6,000-mark, down 260.2 points at 5927.4, adding to the gloom seen last Friday when it fell almost 3%.
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The news sent RSA’s share price soaring 5.05 percent to 520 pence, helping push the London stock market higher in early trade.
In terms of individual stocks, miners Anglo American fell 5.9%, BHP Billiton dropped 5.4% and Rio Tinto slid 4.6%.
Today’s drop of 4% put the index on course for its biggest one-day slide since September 2011 when it dropped by 4.7%.
Stocks tumbled Monday as China’s main index sank 8.5 percent in tumultuous trading spurred by deepening fears over the slowdown in the world’s second-largest economy.
European stocks slumped on Monday following a rout in Chinese markets, wiping hundreds of billions of euros off leading shares and sending one benchmark index to a seven-month low. Look, what’s going on is, essentially it’s all about China at this stage. In Japan, where the economic picture also remains clouded, the Nikkei 225 closed down 4 per cent and the Topix index fell 3.3 per cent.
“Many market participants were expecting that their prayers will be answered over the weekend after they suffered heavy losses last week and the People’s Bank of China (PBoC) will trigger more quantitative easing and will reconfirm their support”, said Naeem Aslam, an analyst at Avatrade.
Global Monetary Fund executive director Carlo Cottarelli also tried to instil some calm, saying China was not a crisis but simply undergoing a “necessary” adjustment for the economy.
“My biggest concern is that global growth momentum is very fragile”.
Oxford Economics Andrew Goodwin underlined the implications of the slump. If the renewed fall in the oil price were sustained, it would keep inflation lower for longer, potentially even keeping core inflation down through the impact on input costs in other sectors, ‘ Goodwin said.
Investors in the U.S. are watching China but closer to home, they’re watching what the Federal Reserve and whether it decides to raise its benchmark interest rate.
“We recognize that the distribution of near-term market risk has shifted”, added Goldman as it lowered its three-month view on European equities to neutral from overweight, and raised U.S. equities to neutral from underweight.
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‘With 24 days to go until we find out, the probability of a hike has gone down to 34% from a 54% recent peak on 9 August’.
