LONDON'S blue chip shares closed at their lowest level for more than three years, after markets in China again suffered following disappointing economic data.
The FTSE 100 Index was down 40.6 points at 5871.8, following a 5.3 per cent fall on the Shanghai Composite overnight after data revealed that producer prices fell for the 46th month in a row in the world's second largest economy.
This pushed the London market down to its lowest level since December 2012.
The fall comes after a torrid week that saw global markets tumble after a run of poor economic data and interruptions to trading on Chinese markets.
Last week top flight shares in London saw £85 billion wiped off their value after tumbling 5.2 per cent.
Germany's Dax yesterday fell 0.3 per cent, while the Cac 40 in France was flat.
The pound was slightly up against the US dollar at just over 1.45 with little economic data to trade on, and just ahead against the euro at just under 1.34.
On the London market, miners were in negative territory with BHP Billiton down 16p to 636.1p, Antofagasta falling 10.6p to 387.7p, and Glencore falling 4.1p to 73.4p.
Dublin-based drugmaker Shire was the biggest faller in the top flight after it agreed a US$32 billion (£22bn) deal to buy American rival Baxalta International, in a deal that maintains takeover interest in the pharmaceutical sector.
Shares fell 352p to 3925p.
Sainsbury's was up 1.4p to 243.3p, with the supermarket due to post key Christmas trading figures tomorrow.
Investors will also want to know whether the group will make another approach for £1.1bn-rated Argos-owner Home Retail Group after revealing it made an approach last week.
Home Retail Group investors want a bid closer to £1.6bn, or around 200p a share, according to weekend reports in The Sunday Times.
In the FTSE 250, Home Retail Group was a strong riser, up 6.8p to 144.7p.
Back in the top flight, Taylor Wimpey said it built more homes in 2015 than at any point during the last six years, as the housebuilder enjoyed a strong home building market.
It said it built 13,341 homes last year at an average selling price up 8 per cent to £230,000 compared to 2014, as the group benefited from record operating margins of more than 20 per cent.
Analysts at Jefferies said Taylor Wimpey's trading update suggested that the 2015 results will be record-breaking although in line with expectations.
Shares edged up 1.2p to 195p.
Telecoms giant BT announced that Clive Selley will become the new boss of its networks arm, Openreach, later in this quarter.
Mr Selley, who is head of BT Technology, replaces Joe Garner, who is leaving to become chief executive of the Nationwide Building Society.
BT shares slipped 2.7p to 463p.
The biggest risers on the FTSE 100 Index were Whitbread up 79p at 4199p, Sage Group up 10.5p at 588p, Carnival up 64p at 3837p and BAE Systems up 7p at 526.5p.
The biggest fallers on the FTSE 100 Index were Shire down 352p at 3925p, Sports Direct International down 30.3p at 403p, Glencore down 4.1p at 73.4p and Antofagasta down 10.6p at 387.7p.
