China factory data fuels slowdown fears

Factory activity in China shrank at its fastest pace in more than six years in August, data suggests.

The private Caixin/Markit manufacturing purchasing managers’ index (PMI) dropped to 47.1 from 47.8 in July. A figure below 50 indicates contraction.

The data triggered another sell off in Chinese shares, which ended the day down more than 4%.

The factory data is likely to compound global worries that the Chinese economy is set for a continued slowdown.

Investors are growing increasingly concerned, as the Shanghai Composite index is now down 12% this week. European markets were also lower again on Friday, with the UK’s FTSE 100, Germany’s Dax and France’s Cac 40 all down about 0.5%, after the Dow Jones in the US closed down 2% on Thursday.