London shares opened sharply lower on Thursday as Asian investors panicked in the wake of weak economic data from China.
The benchmark FTSE 100 index plunged 109.11 points or 1.60 percent to 6,731.16 points at 8:38 am after soaring on Thursday to a fresh 13-year high.
Tokyo share prices plummetted more than seven percent earlier on Thursday on record volumes as the Nikkei 225 experienced its biggest daily fall since March 15, 2011, in the wake of a huge earthquake-tsunami.
“Towards the end of the trading, panic selling was seen in massively heavy trading,” said Hirokazu Fujiki, strategist with Osakan Securities.
“We can’t tell whether or not this was a temporary storm of selling before watching reactions from US markets later today,” Fujiki told AFP.
Wall Street had already closed lower on Wednesday amid fears the Federal Reserve may soon taper off its buying of assets, a policy aimed at supporting the US economy.
The huge drop in Tokyo came after HSBC said manufacturing activity in China contracted in May for the first time in seven months in another sign of the weakness of the recovery in the world’s second-largest economy.
“The negative Chinese indicator triggered today’s selling,” said Fujikiki. “It was no wonder sizable selling could emerge as Japanese shares rose quite fast recently.”
State-rescued Royal Bank of Scotland led the London fallers, sinking 4.32 percent to 334.50 pence, while mining stocks were also hit by the fears about China. Rio Tinto dropped 3.66 percent to 2,931 pence and Anglo American shed 3.45 percent to 1,596.50 pence.
Microchip specialist Arm Holdings fell 3.62 percent to 1,012 pence and temporary power supplier Aggreko lost 3.60 percent to 1,795 pence.
Utilities were the only blue chip stocks in positive territory as United Utlities edged up 0.51 percent to 785.50 pence and Severn Trent added 0.20 percent to 2,049 pence.
London shares plunge amid panic over China data
