Market overview: Shares drop on China, Middle East angst

1630:Close Shares of commodities and emerging market-related companies led on the downside on Monday after a sharp slump overnight in Shanghai equities. Shire was also in the red following speculation it was close to completing a takeover of Baxalta. Weak manufacturing sector survey data out of the States did little to bolster sentiment, nor did a serious flare-up of diplomatic tensions between Iran and Saudi Arabia. Despite the latter, front month Brent crude futures finished the session 0.7% lower at $37 per barrel in ICE trading. Three-month copper futures also dug themselves further into hole, falling 2.2% to end the day at $4,602 per metric tonne out on the LME. FTSE 100 down 148.89 points to 6,093.43.

1500: The Institute for Supply Management’s US manufacturing sector purchasing managers’ index dropped from a reading of 48.6 for November to 48.2 in December. That was worse than the median forecast from economists for a rise to 49.1.

1330: Three-month copper futures on the LME are standing 1.3% down at $4,637.50 per metric tonne in LME trading.

1135: Front month Brent crude futures are moving higher by 1.58% to $37.88 per barrel on the ICE.

1050: Copper futures on COMEX are lower by 2.62% to $207.9 per pound in COMEX trading while three-month copper futures were being quoted at $4,618 per metric tonne in LME trading, down from $4,705 per metric tonne on 31 December.

1045: China's stock market dip has little to do with the December PMI data coming lower, contrary to reports, says Mark Dampier, head of investment research at Hargreaves Lansdown. The fall has much more to do with worries that major shareholders will reduce their positions after the ban of share sales and short selling which came in at the end of trading on Friday. "Long term investors need to ignore much of this short term noise and make sure they have enough cash for everyday needs. Despite the seas of red, market falls should be seen as buying opportunities,” he said.

0935: The headline UK manufacturing sector PMI slipped from 52.5 in November to 51.9 in December (consensus: 52.8). Nevertheless, the average output balance for the fourth quarter as a whole still improved from a reading of 53.0 in the third quarter to 55.6. That suggests the sector may have registered positive growth in the last quarter of 2015 following two consecutive quarters of contraction, Capital Economics says. However, strength in sterling and weakness overseas mean factories will continue to have to rely on the domestic economy, the think-tank said.

0844: Shares crashed lower in morning trading in reaction to wobbles in Chinese stocks, amplified by weaker manufacturing data in December. Acting as a backdrop, markets are also keeping tabs on what are clearly heightened tensions between Iran and Saudi Arabia over the last few days. However, for the moment those have yet to make themselves felt in oil futures. Anglo American is doing worst in early trading, followed by the likes of Old Mutual and StanChart, likely due to the exposure of the latter two to emerging markets. FTSE 100 down 99.59 points to 6,142.65.