Markets fall again on disappointing Chinese data

The FTSE fell another 70 points in opening deals after weak Chinese manufacturing data, with Barclays leading the retreat after a disappointing trading update late yesterday.

The main UK index was 71.3 points lower at 4845.71 and has now lost over 15% since April highs.

The mid-cap FTSE 250 was 189 points or 2.02% lower, at 9176.00. 

Chinese manufacturing in June was weaker than in any time since February reflecting the government's attempts to rein in lending but adding to fears that the global economic recovery may be losing momentum.

The news dragged China's SSE Composite Index down 1.02% to 2,373.79. The index posted its biggest quarterly loss in more than two years in the three months to Wednesday.

The news also dragged Japan's Nikkei down 2.04% to 9191.60.

Across the channel, signs of a slowdown in Spanish manufacturing Purchasing manager's index added to the country's woes. Last night Moody's placed the Spanish government's credit rating on review for a downgrade, adding to investor jitters before today's government bond auction.

UK manufacturing PMIs for June are due at 9.30.

Banks remain in focus after a disappointing trading update from Barclays. The group said that its capital markets business had slowed in the May and June as market nervousness weighed. That echoes recent comments from Standard Chartered and recent downbeat comments about the second quarter performance by US investment banks.

Barclays shares were 2.81% lower at 262.85p

The news also weighed on RBS shares, down 2.68% at 40.24p

The EU has agreed new rules to cap bonuses paid to bankers from 2011 adding to the mixed newsflow on banking regulation recently although it is expected to have only limited impact here.