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Stock markets in London, Paris and Frankfurt have fallen sharply as fears of a Chinese economic slowdown continue to haunt investors.
London’s FTSE 100 index was down by 3% at lunchtime, with major markets in France and Germany also falling by a similar amount.
Shares in Asia were hit overnight, with the Shanghai Composite in China closing down 8.5%, its worst close since 2007.
Global investors worry about growth in the world’s second largest economy.
China’s central bank devalued the country’s currency, the yuan, two weeks ago, raising fresh concerns that a slowdown in the country’s economy was worse than originally feared.
Currencies and commodities are also falling sharply, because those markets rely heavily on strong demand from China.
Analysis: Karishma Vaswani, Asia business correspondent
Beijing’s official mouthpiece has called it China’s “Black Monday”.
The Shanghai Composite tumbled by 8.5%, its biggest fall since 2007. That plunge wiped out this year’s gains as investors refused to buy into the Chinese government’s repeated attempts to shore up confidence.
Everyone wants to know what the Chinese government is going to do next to shore up shares and confidence in the economy.
The smart money is on the central bank reducing interest rates and injecting a semblance of consumer confidence into the markets.
That is what many had hoped would happen over the weekend.
But at each point in what appears to be an ever-deepening Chinese slowdown, the government has seemed slow to react.
Philosophers stone – selected views from the boat http://philosophers-stone.co.uk
Source: http://www.philosophers-stone.co.uk/?p=2313
