Overnight weakness in Asia spilled over to London this morning as global markets responded to data showing factory activity in China slowed down by more than expected in November.
Furthermore, a HSBC study shows that growth in Chinese factories in November stalled as output shrank for the first time in six months, further fuelling fears that the world's second biggest economy was slowing down.
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The BBC notes the risk that China might miss its official growth target of 7.5% this year for the first time in 15 years is growing.
Alaistair Chan, economist at Moody's Analytics, told the BBC he had expected the slowdown in manufacturing and was a "little more pessimistic" than the market for two reasons.
"Firstly, there are signs the recent export boom is fading. Meanwhile, the housing market and related sectors such as steel and cement manufacturing, remains in a slump", Mr Chan said.
Reuters points out that the weakness in London this morning is also partly due to early indications of disappointing sales at the start of the US holiday shopping season and Swiss voters overwhelmingly rejecting a proposal to boost central bank gold reserves, providing a new trigger for sell-offs in an already nervous market.
Marketwatch reports that gold early this morning was down $26, or 2.2%, at $1,149.20/oz. Silverwas hit even harder, down 69 cents, or 4.5%, to $14.80 an ounce.
Oil remained under pressure following Opec's decision last Thursday not to cut production to support prices. Brent crude fell more than $2 a barrel to a five-year low below $68/barrel this morning as investors looked for a price floor.
Reuters notes that oil has lost 10% since last Thursday and that both US crude and Brent have fallen for five straight months oil's longest losing streak since the 2008 financial crisis.
On the companies front, oil and gas firmBG Groupbowed to shareholder pressure and revised the remuneration package for its new chief executive, Helge Lund.
BG investors had heavily criticised the group for proposing a £25m 'golden hello' for Lund. He will now receive £10.6m in shares, rather than the original sum.
Asset manager Aberdeen managed to edge ahead after presenting mixed full-year numbers. The group blamed weakness in emerging markets for £20bn of net outflows, casting a shadow over slightly better-than-expected full-year profits on Monday.
Meanwhile, the Daily Mail reports on the government's announcement of "the biggest, boldest and most far-reaching roads programme for decades". The newspaper points out, however, that many of the 80 new English road schemes announced in the£15bn package are in key coalition constituencies.
The projects include the tunnel to tackle a bottleneck at Stonehenge on the A303 and improved M25 junctions.
In early morning trading, the FTSE 100 was down 56.62 points or 0.84% to 6,666.
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