Europe open: Stocks slide on weak China cues as oil prices keep tanking

European stocks slid in early trade following another dismal performance in China, where trading was halted again after the CSI300 fell more than 7%, setting off the market’s circuit breakers for the second time this week.

At 0900 GMT, the benchmark Stoxx Europe 600 index was down 2.6%, Germany’s DAX was 3.3% lower and France’s CAC 40 was off 2.8%.

Stocks in Asia were under pressure as concerns about economic growth in China continued to rattle investors after the People’s Bank of China guided the yuan lower again. The PBoC set the yuan’s midpoint at 6.5646 to the dollar, which was 0.5% lower than Wednesday’s fix.

“Not only was this the biggest drop between daily fixings since the 3% devaluation in August, but it is also marked the yuan’s lowest level against the US dollar for three and a half years,” said David Morrison, market analyst at SpreadCo.

As China woes intensified, basic resources – which are highly dependent on Chinese demand – came under pressure, with the Stoxx 600 index for the sector down a whopping 5.4%.

Energy-related stocks were also firmly under the cosh, with the sub-index for oil and gas 4.5% lower as oil prices continued to slide amid worries about oversupply. West Texas Intermediate was down 4.7% to $32.38 a barrel and Brent crude was 4.8% weaker at $32.58.

In corporate news, beleaguered German car maker Volkswagen was in the red following a report by German newspaper Sueddeutsche Zeitung suggesting the company may have to buy back 115,000 cars in the US due to the emissions scandal.

London-listed retailer Marks and Spencer edged higher after announcing that its chief executive Marc Bolland will step down this year.

Pandora was also in the black after the Danish jewellery retailer said it plans to open 200 to 300 stores a year between 2016 and 2018, as it reported a 40% jump in 2015 sales.

Earlier, data from Destatis showed German manufacturing orders rose more sharply than expected in November.

Orders were up a seasonally-adjusted 1.5% on the month compared with economists’ expectations for a 0.3% increase.

Domestic orders were 2.6% higher while foreign orders rose 0.6% on the previous month.

New orders from the euro area were down 0.5% on the previous month, while new orders from other countries increased 1.4%.

Still to come on the macroeconomic front, Eurozone consumer confidence, retail sales and the unemployment rate for the bloc are all due at 1000 GMT. In the US, initial jobless claims are at 1330 GMT.