Global stock markets hit by weak Chinese data

Renewed fears over growth in China have hit global stock markets, 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 UK’s FTSE 100 closing down 3% and France’s Cac 40 and Germany’s Dax about 2.4% lower.

Earlier, figures for August showed factory activity in China contracting 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.

“The importance of today’s announcement is that the slowdown is hitting the larger state-backed firms who typically take longer to feel the pain,” said Josh Mahony from online trading firm IG Index.

“There are precious few signs that China is beginning to recover, and while [the People’s Bank of China’s] action can provide a temporary reprieve, we are yet to see any evidence that it is doing any good to the economy,” he added.