FTSE hit by China stockmarket rout

The FTSE 100 has dropped by 2.4 per cent in early trading as the sell-off in China shows no sign of abating.

As at 8.30am this morning, the FTSE had fallen to 6,042 after China’s Shanghai Composite index fell a massive 8.49 per cent to close at 3,209.91.

The Euro Stoxx 50 is also down 2.8 per cent at 3,156, while the Paris CAC 40 is down 2.7 per cent to 4,503.

The BBC reports the Chinese authorities are trying to reassure investors and have allowed its main state pension fund to invest in the stockmarket.

Earlier this month the Chinese central bank devalued the yuan in a bid to boost exports. Over the last week the Shanghai index fell 12 per cent, marking a 30 per cent drop since the middle of June.