FTSE 100 Back Above 6,000 As China Slump Ends

The FTSE 100 Index has headed back above the 6,000-mark after a Chinese stock market slump came to an end.

London's leading share index added more than 50 points to edge above 6,000 in early trading though it later slipped back below the mark. It (Other OTC: ITGL - news) had plunged below that level when it fell sharply in the previous session.

Germany's Dax was also ahead though France's Cac 40 saw early gains fade.

Shares (Berlin: DI6.BE - news) in China rallied overnight after the country suspended a "circuit breaker" mechanism which had been designed to halt volatility but appeared to backfire.

The CSI 300 Index of major Shanghai and Shenzhen stocks closed 2% up though Chinese markets still ended a tumultuous week 10% lower.

Richard Hunter, head of equities at Hargreaves Lansdown (LSE: HL.L - news) stockbrokers, said: "With (Other OTC: WWTH - news) the Chinese deciding that the idea of a circuit breaker is broken, withdrawing the facility after just four days with it having been triggered twice, some stability returned to Asian markets overnight and London in turn."

:: Ghosts Of China Stock Market Crash Return

China halted trading twice this week as sharp falls triggered a fail-safe mechanism designed to arrest steep share losses.

But the intervention failed to assuage investor nerves and may instead have added to jitters across the globe, with Wall Street seeing steep falls on Thursday following heavy losses on the FTSE 100 and other European indices.

Markets had been spooked by China setting a lower value for its currency, the yuan.

But the country's central bank set a stronger rate overnight, helping to soothe sentiment.

Previously the scale of the yuan's devaluation – a measure which helps its manufacturers as they face a slowdown – had compounded fears about how badly growth in the world's second biggest economy was stuttering.

But as the Chinese share rout came to a halt, global attention was also turning to the health of the US economy as figures showed weakness in manufacturing, construction spending, car sales and export growth – prompting experts to slash fourth quarter growth forecasts.

Meanwhile in corporate news, two Apple (LSE: 0R2V.L - news) suppliers added to growing worries about slowing shipments of iPhone 6S and 6S Plus by cutting their revenue estimates for the third quarter.

The choppy picture on world markets had seen oil prices slip to a new near 12-year low on Thursday as a barrel of Brent crude fell close to $32.

It climbed back above $34 in the latest session.

Meanwhile the pound slipped to its lowest level against the US dollar since May 2010 as prospects of a UK interest rate hike faded amid gathering gloom for the domestic and world economies.

Chancellor George Osborne warned of a "dangerous cocktail" of risks to the UK at home and abroad.