FTSE 100 loses £74bn amid China markets woe

The British lobbying body is forecasting 2.6 percent growth for 2015 and 2.8 percent for 2016, up from its June’s projections of 2.4 percent and 2.5 percent respectively.

All sectors traded higher, led by the technology, basic materials SXPP, +5.49% and oil and gas SXEP, +4.04% groups. Chinese shares suffered a dramatic fall and hundreds of billions of dollars were knocked off global stocks.

During this period, rightly or wrongly, China has become the de facto fulcrum of global market direction. There are specific reasons why some shares are falling – those exposed to mineral or oil production, for example, or selling to the Chinese market.

“There was one point today when there just seemed to be no buyers and markets just went into freefall”.

China’s central bank cut its benchmark lending rate for the fifth time since November and lowered the amount of cash banks must set aside, stepping up efforts to cushion the stock-market slide and a deepening economic slowdown. “The US is experiencing its slowest post-recession recovery on record, despite huge stimulus”.

The FTSE 100 saw its 10th session in a row of falls – the worst losing streak since it finished lower for 11 days in succession in 2003. Here’s everything you need to know in basic terms.

The drops mean over $5trillion have been wiped off global stocks since August 11. Investors are demanding higher yield as the concerns about the health of the global economy continue to grow.

This latest tumbles in China deal a fresh blow to sentiment across the region as benchmarks in Taiwan, the Philippines and Indonesia all lost more than 4%. To fuel this explosion, and the biggest construction boom in history, it’s sucked up vast amounts of the world’s resources.

Video: China’s Economy: What Happened?

But experts fear the wheels of China’s economy, if not coming off, look buckled.

The pan-European FTSEurofirst 300 index, which slumped 5.4% on Monday, was up 4.1% at 1120 GMT, as was the blue-chip Euro STOXX 50 index.

But most economists don’t trust its figures which, even then, comes amid ever drastic action – such as the recent devaluation of the yuan.

Does it matter to us in the UK, though?

“Pension funds and private investors alike will be licking their wounds, and wondering when the sell-off is going to come to an end”. “We constantly monitor the current economic and financial situation in China and its potential impact on Scotch exports“.

Moody’s today announced that Prime Minister Alexis Tsipras’s resignation is “credit positive for the sovereign because it offers the possibility of a new more cohesive government, which would improve prospects for implementing Greece’s third bailout package and reducing liquidity and funding risks”, Tsipras’s resignation opens up the opportunity for a new, possibly a more moderate Syriza party governing alone or in a coalition with other pro-European parties.