World Stocks Plunge on China Manufacturing Data

Global stock markets have been hit by renewed fears over China’s economic growth, with the main indexes falling sharply.

Wall Street traded sharply lower, with the Dow Jones down more than 300 points, or 1.9%, at 16,215.

European markets also fell, with the London’s FTSE 100 closing down 3% and France’s CAC 40 and Germany’s DAX about 2.4% lower.

Earlier, figures for August showed China’s manufacturing contracted at its fastest pace in three years.

The official manufacturing purchasing managers’ index (PMI) dropped to 49.7 from 50 in July. A figure below 50 indicates contraction.

It follows recent turmoil in the markets sparked by concerns over a slowdown in the world’s second-largest economy.

Energy companies led the way down on the Dow, with Chevron and Exxon Mobil down about 3%. This followed a fall in the oil price, which was down more than 4% at $51.89.

Before Tuesday’s fall, the price of oil had risen by about 25% in the past three trading sessions.

The S&P 500 was also down about 2% at 1,934.18, while the tech-heavy NASDAQ was 1.6% lower at 4,699.21.

Global markets sustained heavy losses in August – for both the UK’s FTSE 100 and the US’s S&P 500, it was the worst month since May 2012.

As well as the weak China factory data, investors are unsure about the US Federal Reserve’s next move. Many had penciled in the a rate rise – the first move since the financial crisis – for September. However, given the recent stock turmoil, analysts seem less certain.