FTSE opens up as Chinese stocks tumble again

London’s top-flight shares rose more than 1.5 per cent to hover just below the 6,000 barrier after losing £74bn yesterday.

This was despite Chinese stocks tumbling again this morning – plunging more than 6 per cent, and hitting their lowest level in eight months.

According to Sky News, there was also a recovery in European shares, after they lost around £387bn during Monday’s panic.

The pan-European FTSEurofirst 300 index, which slumped 5.4 per cent yesterday, rose 1.8 per cent, while the eurozone’s blue-chip Euro STOXX 50 index advanced 1.9 per cent.

The mass sell-off has been triggered by China’s slowing economy and the depreciation of the yuan – as well as plunging commodity prices and fears over the timing of the next US interest rate hike.

The People’s Bank of China is under pressure to announce a new round of quantitative easing to boost money supply in an economy suffering weaker demand across all sectors.

Beijing intervened numerous times to try to stop speculators selling vulnerable assets.

The most recent move allowed the state pension fund to invest up to 30 per cent of its assets in Chinese stocks.

Since its peak on 12 June, the Shanghai market has lost nearly 40 per cent or around $5.5tn (£3.5tn) of value.

To put this into perspective, total UK GDP output for 2014 was £1.84tn.