(MENAFN- ProactiveInvestors)It wasn't a great start to the New Year for the UK's main index as it registered one of the worst first trading days on record. China dominated the headlines as the Caixin Purchasing Managers' Index had a reading of 48.2 for December the tenth reading in a row below 50. Joshua Mahony at IG said: 'If markets abide by the mantra of starting as you mean to go on we could be in for a seriously messy 2016 after global indices tumbled on the first trading day of the year.' The FTSE 100 dropped over 2% ending the day around 150 points lower at 6093. While a bad day for the UK index it was worse for the DAX where Germany's export exposure to China sent shares plummeting by more than 4.5% to 10252. Over in the US markets weren't much better with the Dow Jones Average off 351 points at 17074 the S&P 500 down 38 at 2006 and the Nasdaq Composite 137 points weaker at 4871. On the FTSE100 Anglo American (LON:AAL) dropped 6.9% to 278p and Glencore (LON:GLEN) fell 5.5% to 85p. Also lower was Standard Chartered (LON:STAN) which eased 4% to 540p as stocks with reliance on Asian consumption such as the Asia-focused bank Standard Chartered were hit heavily. With only two risers on the index good news was hardr to come by but Randgold Resources (LON:RRS) was around 4.25% higher at 4319p. The price of gold rebounded on Monday after the disappointing data in China was released. Gold traditionally seen as a safe haven in times of economic strife rose US$17 or 1.6% to US$1078. Elsewhere on the index pharma giant Shire (LON:SHP) is closing in on its long-awaited US$32bn potential takeover of US rival Baxalta reports on Monday claimed. The companies could announce the deal "within days" as rumours circulated that Shire was preparing to increase a US$30bn all-share approach in July. Shares eased 5.5% to 4440p. In the small cap world Solo Oil (LON:SOLO) climbed 7.2% to 0.33p as the group of small oil companies driving the Horse Hill oil project near Gatwick airport have been cleared to carry out production testing. UK Oil & Gas Investments a 20% stakeholder this morning confirmed that the UK regulator the Oil and Gas Authority (OGA) had granted consent for the proposed testing and all necessary permissions are now in place. Conversely PeerTV (LON:PTV) lost more than 20% to 1.58p as it issued 2.5mln shares at 1.96p per share to raise £50000 as part of the repayment of a revolving financing facility which previously stood at £90000. Also lower was Work Group (LON:WORK) which fell 18% to 2.2p as Rose Colledge resigned from the board of the recruitment firm following the sale of its operating business. LUNCHTIME REPORT The London market stayed deep in negative territory on Monday after downbeat data sparked a market suspension in China. The FTSE 100 Index backtracked 115 points to 6126 as weak manufacturing figures triggered a so-called "circuit-breaker" in trading in Shanghai. However there was better news in continental Europe as the eurozone's manufacturing purchasing managers index (PMI) for December hit a 20-month high. That failed to stop Germany's Dax and France's CAC-40 falling while Spain's Ibex also dropped as Spain marginally missed manufacturing estimates last month. In the UK manufacturing PMI figures for December came in at 51.9 lower than the 52.5 in November and also falling short of analysts' forecasts of 52.8. James Smith at ING Bank said the data suggested UK manufacturing contributed very little to the country's fourth-quarter economic growth. He said: "Although we continue to forecast an interest rate hike in the second quarter the risks surrounding the EU referendum are beginning to build and the probability that the Bank of England will leave rates lower for a longer period of time is increasing." The Footsie collapsed under the weight of falling mining stocks following the dismal Chinese data. Glencore (LON:GLEN) reversed 5.3% to 85.7p and Anglo American (LON:AAL) was off 4.9% at 284.8p. Shares in drug group Shire (LON:SHP) shed 177p to 4521p on reports that it was close to increasing its US$30bn offer for US rival Baxalta. But shares in Horse Hill oil firms were on the up after the UK Oil & Gas Authority (OGA) gave consent for an extended flow test over three separate zones in the HH-1 discovery well near Gatwick airport. Solo Oil (LON:SOLO) spurted 8.1% to 0.34p and UK Oil & Gas Investments (LON:UKOG) climbed 5.5% to 1.45p. Cairn Energy (LON:CNE) was 2% higher at 160.9p as the oil explorer with operations in the North Sea Greenland and Africa revealed the success of an appraisal well off the coast of Senegal. Shares in Vast Resources (LON:VAST) surged 28.1% to 1.02p as it unveiled a financing deal with investor Crede to raise up to £5mln to further mine development in Romania. Investors returning to work after the Christmas and New Year break appeared unimpressed by an update from Kefi Minerals (LON:KEFI) last week saying it was on track for the first draw-down on its project finance for the Tulu Kapi project in Ethiopia by mid-2016. Shares dropped 3.1% to 0.31p. LONDON OPEN Blue-chips plunged on Monday after a chaotic start to New Year trading in China. The FTSE 100 Index backtracked 115 points to 6126 as downbeat manufacturing data prompted officials to suspend trading in Shanghai. However there was better news in continental Europe as the eurozone's manufacturing purchasing managers index (PMI) for December hit a 20-month high. That failed to stop Germany's Dax and France's CAC-40 falling while Spain's Ibex also dropped as Spain marginally missed manufacturing estimates last month. The Footsie collapsed under the weight of falling mining stocks following the dismal Chinese data. Glencore (LON:GLEN) reversed 6.1% to 84.96p and Anglo American was 7.2% off at 277.8p. In the UK manufacturing PMI figures for December came in at 51.9 lower than the 52.5 in November and also falling short of analysts' forecasts. Back in the markets shares in drug group Shire (LON:SHP) shed 129p to 4569p on reports that it was close to making a higher offer for US rival Baxalta. But shares in Horse Hill oil firms were on the up after the UK Oil & Gas Authority (OGA) gave consent for an extended flow test over three separate zones in the HH-1 discovery well. Solo Oil (LON:SOLO) spurted 4.8% to 0.32p Stellar Resources (LON:STG) lifted 10% to 0.28p and UK Oil & Gas Investments (LON:UKOG) climbed 3.6% to 1.42p. Cairn Energy (LON:CNE) was 4.3% higher at 164.5p as the oil explorer with operations in the North Sea Greenland and Africa revealed the success of an appraisal well off the coast of Senegal. Shares in Vast Resources (LON:VAST) surged 18.75% to 0.95p as it unveiled a financing deal with investor Crede to raise up to £5mln to further mine development in Romania. MARKET PREVIEW The FTSE 100 looks likely to open its account for the year very firmly in the red with Middle East and China weighing on sentiment. In fact the drama that unfolded in the People's Republic is likely to overshadow a rather tepid start in London after trading on both the Shanghai and Shenzhen exchanges was suspended. The former dropped almost 7% - or more than 250% points – after worse than expected manufacturing data. The fall-out was felt across the region with the Nikkei in Japan and the Hang Seng in Hong Kong both tumbling 3%. Australia's ASX index put in a relatively robust performance by losing just 0.5% during a stormy opening session. 'Trading in the first few days of 2016 will likely be shaped by investors' determination whether the New Year will see a continuation or an end to the driving forces in 2015: namely concerns over China's slowdown the commodity crunch and rising US interest rates' said Jasper Lawler of CMC Markets. In short the world's equity markets are set to chart an uncertain course in the opening days of 2016 he concludes. Here in the UK the FTSE 100 which lost almost 5% last year is predicted to open 63 points lower at 6181.32 according to spread-betting firms. Turning to the commodities markets the price of a barrel of London traded crude actually jumped – and to a two-week high to around US$38 a barrel. This however was probably more a symptom of the escalating tensions between Iran and Saudi Arabia than indicative of a revival. The words of Bob Dudley boss of BP are probably still ringing in traders' ears. He said the pain is likely to continue in the short term at least with little sign of a rise in oil prices until the latter part of the year. All this uncertainty was at least positive for gold which is often bought as a safe-haven investment in times of turmoil. The cost of an ounce of the yellow metal rose US$3 an ounce at US$1063.
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