The FTSE 100 has given up the gains it made earlier in the year, and is now roughly flat for 2015.

Mr McLevey additionally famous, because the probability of a September rate of interest hike appears to have diminished.

“Instead continued concerns over China have sent the European indices to seven month lows”.

“The raised guidance and Q3 results have led us to upgrade our forecasts by 9 percent for (2015)”, analysts at Deutsche Bank said in a note.

Investors were warily “keeping tabs on Asian markets”, said Brenda Kelly, head analyst at the London Capital Group, after the Shanghai index sank 6.15 percent on broad worries over the slowing Chinese economy and the government’s commitment to prop up shares. He expects China to react to the deteriorating situation with a cut in interest rates that would stimulate domestic demand and boost growth in the second half of the year.

Authorities in the country staged yet another intervention to little effect.

David Madden, of IG, said: “It used to be just Australia that would catch a cold when China sneezed, but the Chinese sell-off is far more infectious than initially thought”. On many measures the shares of UK companies look reasonable value, and we believe there is scope for the UK market to make significant progress from levels which are around 10% cheaper than three months ago.

The price of Brent, the global benchmark for oil, was down $1.72, or 3.5%, at $47.09 a barrel.

Mining giants such as Anglo American and Rio Tinto, which represent a large and heavily-weighted chunk of the FTSE 100, also fell. Gold miners Fresnillo, up 5.6% and Randgold Resources, up 5.8% benefited from the rise in the gold price, standing at USD1,149.60 an ounce when the European stock markets closed.

Meanwhile, Germany’s benchmark index DAX plunged 233.77 points or 2.14 percent to end at 10,682.15. All of Kaz Minerals’ operations are in Kazkakhstan, and the devaluation of the tenge will drive down costs at its operations, while sales are denominated in dollars. Among small caps, North Sea-focused oil producer Enquest’s shares tumbled 6 per cent after it reported a 34 per cent decline in profit before tax and net costs for the first half of the financial year. This has been pushed back until early 2016. The FTSE 100 has returned 0.3% so far this year, including dividends, but if you strip out oil and mining stocks it has returned 4.8%.

In Europe, official data showed that Britain’s annual inflation rate rose to 0.1 percent in July.