FTSE 100 at lowest close since January

The Asian markets dropped even lower on Thursday in the latest chapter of an ongoing slump which threatens to collapse the entire financial system of China.

Fears over China and a US interest rate hike sent London’s blue chip share index to a new seven month low as the global stock market rout shows no sign of abating.

The FTSE 100 has given up its gains made earlier in the year, and is now down almost 1 percent since the start of 2015.

Only five stocks in the FTSE 100 rose. “The FTSE 100 is actually in negative territory for the year as we speak, and it’s quite hard to see from here what sort of short-term positive impetus the market might take”.

The company’s U.S-listed shares (SHPG.O) rallied towards the end of trading overnight to end up off their intraday lows, as the Nasdaq Biotech Index (.NBI) rising 2.1 percent on Monday. [.N]. Madden notes that the great worry is that China will undergo a dramatic drop in its rate of economic growth, and the knock-on effect ill damage Europe’s own recovery.

However, mining stocks are now at the forefront of the fall, with Glencore’s share price dropping over 8 per cent after a poor set of results, while rivals Rio Tinto, Anglo American and BHP Billiton each fell by around 4 per cent. Hikma was up 2.7% following the drug maker’s report that sales fell 4% to $709 million (http://www.marketwatch.com/ story/hikma-profit-falls-on-generic-drug-price-drop-2015-08-19) in the first half of the year, and adjusted operating profit fell 16% to $204 million. Market sentiment is also subdued ahead of the release of the Fed’s minutes which will be eyed for information about the timing of a future interest rate hike. Fears over the state of China’s economy, the second-largest in the world, have come to eclipse those over Greece’s debt problems in recent weeks, with China’s devaluation of its yuan currency on August 11 adding to concerns. An equally-weighted FTSE 100 index would allocate only 1% to each of these stocks.

But inflation remains extremely low – it was just 0.1% in July and 0% in June – and growth will suffer if there’s a global slowdown.

Greece on Thursday cleared €3.4 billion ($A5.14bn) payment owed to the European Central Bank, a source close to the matter said.

Later on Thursday after the markets closed, the ANA news agency reported, citing government sources, that Mr Tsipras has proposed calling an early election on September 20.