UK shares are bombed-out in early trade on Thursday after torrid sessions overnight in the US and Asia, which included a second circuit-buster halt to trading in China. Trading was halted in Beijing and Shanghai after declines of more than 7% because of the introduction of 'circuit breakers' designed to calm investor nerves.
Further devaluation of China's currency and a sell-off on the country's main stock exchanges piles more pressure on European markets at the open. China's currency, the renminbi, now trades at a five year low against the dollar. The UK benchmark FTSE 100 index tanks 176 points, a decline of nearly 3%, plunging the index back below the 6,000 mark at 5,893.
Stock markets in London, Paris, Frankfurt and Rome all trade more than 2% lower.
Losses in London are led by platinum producer Anglo American (AAL), down 8.4% to 248p, as well as industrial metals specialist BHP Billiton (BHP) which sheds 5.5% to 671p. Emerging markets asset manager Aberdeen Asset Management (ADN) is another casualty, dropping 7.6% to 250p.
Brent crude, a key oil price benchmark, sinks 4.6% to $32.61 (£22.38) creating more pain for oil producers. Premier Oil (PMO) is the biggest loser on the FTSE All-Share, slumping 10% to 32p. Sterling weakens almost cent against the dollar this morning, and now buys $1.457.
In corporate news, the high street is a major focus as iconic retailer Marks & Spencer (MKS) rises 7.5p to 446.2p despite issuing a mixed third quarter trading update. While M&S generated record Christmas sales in food, clothing let the side down again, like-for-like sales falling 5.8% against soft comparatives. Positive sentiment towards the stock reflects the news CEO Marc Bolland has jumped before he is pushed; he is to retire after six years in the hot seat, to be succeeded in April by long-serving M&S man Steve Rowe, Executive Director of General Merchandise.
Wine purveyor Majestic Wine (MJW:AIM) is marked up 6.1% to 347.13p on a strong Christmas trading statement. Over the festive period, total sales fizzed 42.6% higher, boosted by the transformational acquisition of Naked Wines, though the more eye-catching metric is the 7.3% like-for-like growth served up by the Majestic retail business, driven by better pricing, better service and better looking stores.
Discounter Poundland (PLND) takes another hammering, sold down 8% to 176.75p as a subdued third quarter trading statement triggers downgrades. CEO Jim McCarthy bemoans lower high street footfall over the crucial Christmas period. With sales growth curtailed, he now expects full-year pre-tax profit will be towards the lower end of the £39.8 million-to-£45.8 forecast million range.
Alton Towers and Legoland-owner Merlin Entertainments (MERL) falls 2.6% to 432.6p after announcing its chief financial officer Andrew Carr will retire after 16 years in the role. Carr will remain until a successor is appointed and settled into the post.
App store operator Mobile Streams (MOS:AIM) slumps 25% to 6p as the devaluation of Argentina's peso has had a negative impact on the company's net assets denominated in pesos. This will also affect the translation of revenues and costs into Sterling.
Amid continuing pressure on oil prices the oil and gas sector remains under the cosh and this prevents President Energy (PPC:AIM) getting much credit for a positive update on its Argentinian operations. The shares are down 1.9% to 6.25p despite the company reporting good results from a workover programme on its Puesto Guardian concession and revealing positive fiscal terms from the new government in Argentina.
In a sign that so-called 'resource nationalism' is in full scale retreat, fellow hydrocarbons producer JKX Oil & Gas (JKX) says it may restart operations in Ukraine after the country's gas production tax was cut from 55% to 29%.