European stocks fall sharply at open after China, Asian markets dive

A trader works as one of his screens displays news on the Greek debt crisis at the stock exchange in Frankfurt am Main, western Germany, on July 13, 2015.
A trader works as one of his screens displays news on the Greek debt crisis at the stock exchange in Frankfurt am Main, western Germany, on July 13, 2015. PHOTO: AFP

LONDON (REUTERS, BLOOMBERG) - European stocks fell sharply at the open on Monday (Aug 24), with Germany's benchmark gauge headed for a bear market as a slide in Chinese markets continued to roil equities globally.

The Stoxx Europe 600 Index lost 3.5 per cent at 8:13 am in London, deepening its plunge after its worst week in four years. Miners plunged 6.1 per cent for the biggest slump among industry groups as commodities were set for their lowest levels since 1999. Germany's DAX Index dropped 3 per cent, down 21 per cent from its peak.

The pan-European FTSEurofirst 300 was down 3.6 per cent, set for its biggest one day fall since September 2011.

Concerns over China knocked the index last week as it posted its biggest weekly drop since August 2011, and it hit its lowest level since January in early deals on Monday.

Asian stocks dropped to 3-year lows on Monday as a slump in Chinese equities gathered pace, hastening an exodus from riskier assets as fears of a China-led global economic slowdown churned world markets.

Stocks slid after Beijing offered no big policy move at the weekend to support equities, as was widely expected after last week's 11 per cent plunge.

"Another strong sell-off in Asia overnight is once again spreading fear throughout financial markets at the start of the week, piling the pressure on the People's Bank of China to inject some stimulus into the markets stop the rout," Craig Erlam, market analyst at OANDA, said in a note.