UK shares were sharply lower on Wednesday, as investors came back from New Year celebrations to more disappointing data from China that added to existing concerns about the health of the world’s economy.
London’s blue-chip bourse dropped 1.8 percent and the mid-cap index dipped 1.1 percent by 0851 GMT, with eyes on the country’s manufacturing data due later in the morning.
The FTSE 100 was on track for its worst day since Dec. 6, when a sell-off swept global markets after the arrest of a top Huawei executive that had renewed worries about U.S.-China trade tensions.
Early deals pushed all sectors in the red, setting a bleak tone for 2019’s first trading day after both indexes recorded their worst yearly drop since the 2008 financial crisis last year.
After ending a year marred by worries over a slowdown in global economic growth, data on Wednesday showed that as a private sector survey showed China’s manufacturing activity contracted for the first time in 19 months.
It followed a poor official survey on factory output from the world’s second-largest economy on Monday.
UK-listed companies with more exposure to the Asian market were the most hit with HSBC edging 2.1 percent lower and Standard Chartered down 3.3 percent.
Fellow financial heavyweights Prudential, Lloyds and Royal Bank of Scotland also fell 2.8-3.9 percent.
A near 2-percent-dip in oil majors BP and Shell also pulled down the main index, as crude prices were lower on surging U.S. output.
Global miners were also weak with copper prices lower amid concerns over growth in top metals consumer China. Antofagasta , BHP , Anglo American , Rio Tinto and Glencore were down between 2.9 percent and 4.8 percent.
Tullow Oil and Premier Oil were among the biggest mid-cap fallers.
On the corporate news side, Ophir Energy shares outperformed the small-cap index and soared over 34 percent after the company said it was in takeover talks with a unit of Indonesia’s Medco Energi International Tbk PT.
Blue-chip and medical products maker Smith & Nephew tumbled 3 percent, with a trader citing a rating cut by brokerage JPMorgan.
Gambling software company Playtech slid 2.3 percent after it said it would pay 28 million euros under a settlement with Israeli tax authorities following an audit of its annual accounts.
Real estate investment trust Hammerson was 2.6 percent lower as it said its share buyback program will be paused ahead of the release of 2018 results.