Global stocks sink after China index dives 7 per cent

US stocks dropped sharply in trading today after a plunge in China triggered by weak Chinese manufacturing data and escalating tensions in the Middle East.
The Dow Jones industrial average sank 2 per cent. China's main index plunged 7 per cent, forcing an emergency trading suspension. European indexes fell between 2 and 4 per cent.
The Dow Jones industrial average sank 384 points, or 2.2 per cent, to 17,044 as of 10:09 am Eastern time. The Standard & Poor's 500 index lost 41 points, or 2 per cent, to 2,002.
The Nasdaq composite gave up 133 points, or 2.7 percent, to 4,874.

The Shanghai Composite Index dived 6.9 per cent to its lowest level in nearly three months. The drop led the Shanghai and Shenzhen stock markets to halt trading for the remainder of day to avert steeper falls, the official Xinhua News Agency said.
Chinese authorities have been trying for months to restore confidence in the country's stocks after a plunge in June rattled global markets and prompted a panicked, multibillion-dollar government intervention.

Concerns about China's economic slowdown were revived by weak manufacturing data released Monday, along with Middle East tensions, which pushed up oil prices.
Huang Cengdong, an analyst for Sinolink Securities in Shanghai, said selling accelerated as investors tried to lock in trades before trading was halted. He expects further turmoil ahead of corporate earnings reports.

The DAX index in Germany, whose export-led economy is sensitive to the fortunes of China, tumbled 4.2 per cent.
Britain's FTSE 100 fell 2.1 percent while France's CAC 40 dropped 2.4 per cent.
The Caixin/Markit index of Chinese manufacturing, which is based on a survey of factory purchasing managers, fell to 48.2 points in December from 48.6 the previous month, marking contraction for the 10th straight month.
On Friday, an official manufacturing index also showed a persistent contraction in factory activity despite Beijing's stimulus measures.
Saudi Arabia said yesterday it is severing diplomatic relations with Iran, a development that could potentially threaten oil supply.

The world's largest oil supplier executed a prominent Shiite cleric that prompted protesters to set fire to the Saudi Embassy in Tehran and Iran's top leader to criticise Saudi Arabia.
In broader markets back home, mid-cap and small-cap
indexes ended 0.18 per cent and 0.75 per cent lower, respectively.
Of the 30-share Sensex pack, 18 scrips ended higher.
Major gainers were ONGC (3.28 pc), Asian Paints (2.93 pc), L&T (2.58 pc), Adani Ports (2.24 pc), Infosys (1.88 pc), Tata Motors (1.70 pc), HUL (1.60 pc), Bharti Airtel (1.58 pc), Coal India (1.34 pc) and Hero MotoCorp (1.04 pc).
However, Lupin fell by 2.80 per cent followed by NTPC 2.14 per cent, Cipla (1.98 pc), SBI (1.81 pc), Bajaj Auto (1.62 pc) and Gail (1.07 pc).

Among BSE sectoral and industry indices, metal rose by 2.48 per cent, followed by capital goods 1.93 per cent, industrials (1.12 pc), IT (0.92 pc), consumer durables (0.86 pc), power (0.84 pc) and teck (0.83 pc) while healthcare fell by 1.56 per cent, followed by realty 0.30 per cent and utilites 0.25 per cent.
The market breadth remained negative as 1,623 shares ended lower, 1,030 closed higher while 123 ruled steady. The total turnover moved up to Rs 2,742.06 crore from Rs 2,708.89 crore yesterday.