The FTSE 100 has fallen by almost 2 per cent in early morning trading as unrest in Egypt and concerns over China’s slowdown continue to bite.
By 9am the UK’s top flight index was down by 1.63 per cent, or 102.8 points. Services numbers released in China highlight that the construction industry is pulling back progress, further exacerbating worries that the world’s second largest economy is slowing down. Barclays following a downgrade from Standard & Poor’s is the steepest faller, dropping some 4 per cent.
Pressure remains high in Egypt as an army ultimatum for its President Mohammed Morsi to put an end to unrest approaches. Fighting erupted between protesters overnight leaving a reported 16 dead.
In China, the headline services Purchasing Managers Index figures from the National Bureau of Statistics dropped to a nine-month low of 53.9 in June, down from May’s number of 54.3. The sub-index for construction fell to 59.3 from 62.2 in May.
A Markit/HSBC China Services Business Activity Index, posted at 51.3 in June, slightly up from the 51.2 in May. The services sector in China is a major barometer for the nation’s economy, as it was responsible for almost half, at 46 per cent, of the economy in 2012.