FTSE posts biggest one-day fall in over a week

The UK FTSE 100 slumped 3 percent on Tuesday, its worst one-day fall in over a week, with miners hit hardest after a slump in the manufacturing sector in China - the world's biggest commodity consumer. All but one FTSE 100 stock closed in negative territory on Tuesday, London's first trading day of the week after a public holiday on Monday.
Policymakers world-wide have turned more interventionist with a surge in market volatility to levels not seen since the 2008 financial crisis. China's central bank has already repeatedly intervened to stabilise the yuan since its August 11 devaluation sent shockwaves through global markets. "We are sellers across the board," said Mark Ward, head of execution trading at London-based Sanlam Securities. "People are getting back from holidays and trying to make sense of what is going on.
"The China headlines are not helping but I would say it's probably more down to sentiment than a huge shift in the actual economic outlook." The FTSE 100 lagged the pan-European FTSEurofirst 300, down 2.9 percent. "As it stands we've pretty much wiped off any of the gains we saw last Friday ... it does seem like this could be another return to the lows we saw last week, particularly if we don't see any effects from the Chinese interventions any time soon," said Brenda Kelly, head analyst at London Capital Group.
China's official Purchasing Managers' Index (PMI) fell to 49.7 in August from the previous month's reading of 50.0, the weakest showing in three years. That was followed by releases of weak PMI data for both Britain and the euro zone showing manufacturing growth had eased last month. The index's top gainer was engineering components firm Meggitt, rising 2.4 percent, with a trader citing a pick-up in auto sales and a government pledge to spend more than 500 million pounds refurbishing a nuclear submarine base in Scotland.
Miners Glencore, Anglo American and BHP Billiton were down more than 6 percent, leading the fallers as metals prices fell on China demand fears. In the mid caps, China worries also hit shares of hedge-fund manager Man Group, down 6.8 percent after the boss of its China unit was reportedly taken into custody as part of a probe into the causes of recent market volatility.