Global stock markets are enduring a further day of pain following the escalation in the US-China trade war.

Following a 2.4% sell-off on Friday, which followed news that Donald Trump planned tariffs on a fresh batch of Chinese imports, the FTSE 100 had shed a further 2.3% by midday on Monday - to leave the index on 7237 points.

It had slid a further 0.2% by closing, to 7221.82.

US markets also fell on opening, as the Chinese yuan slid below the key $7 barrier for the first time in more than a decade.

US president Donald Trump called the yuan's fall a "major violation" and accused the Chines of "currency manipulation".


Dow Jones Industrial Average was down 1.9% at 25,979.36 by 10 am Eastern Time.

The S&P 500 was down 2% at 2,872.86 while the Nasdaq Composite was down 2.7%, at 7,790.61.

All of the 11 major S&P sectors were in the red but the technology sector in particular - heavily exposed to global technology players in Chinese markets, dropped 3.2%.

Monday's opening followed a brutal session in Asia that saw the Hang Seng in protest-hit Hong Kong shed 2.9% and Japan's Nikkei lose 1.7% - also building on sharp losses from Friday.

Image: The FTSE 100 remains 7% up in the year to date as the weaker pound boosts its dollar-earning constituents

Then, the DAX in Germany and French CAC shed 3% of their value. They closed on Monday down 1.8% and 2.1% respectively.

US futures pointed to losses of more than 1.5% for each of the main indices while gold and cryptocurrencies were among the winners.

Markets have been alarmed and investor sentiment damaged since the US president shocked investors late on Thursday by announcing the fresh tariffs.

Just hours after the conclusion of what he said were "constructive" trade talks in Beijing, he vowed to slap 10% tariffs on the $300bn (£247bn) of Chinese imports not already covered by the charges.

China said it would retaliate if the US carried through its threat to introduce the tariffs from 1 September.

The trade war to date has been blamed for damaging economic output at a global level.

Both the US and Chinese central banks have announced measures to support activity in their own domestic economies.

'For every step forward, we take a step back' on trade war

China's wider response has seen the yuan weaken to hit a 10-year low against the US currency - a scenario that is likely to only stoke more anger within the White House as it demands the Chinese state relaxes its currency controls.

A strong dollar has also exacerbated weakness of the Brexit-hit pound - languishing at $1.21 and at ts lowest level for 23 months versus the euro.

Sterling fared little better despite a closely-watched indicator suggesting a slight pick up in UK growth in July - beating market expectations.

The all-sector purchasing manager's index (PMI) for July suggested a "zero growth" performance in the month following a contraction in June.

Investment-focused stocks were among those to feel the worst pain in London on Monday.

Precious metals miner Fresnillo was the sole gainer on the FTSE 100 as it benefited from the risk-off sentiment.

That has seen gold prices hit six-year highs - nearing $1,500 (£1,236) an ounce.

Naeem Aslam, chief market analyst at Think Markets, noted a leap in the value of Bitcoin.

Image: According to Blockchain, Bitcoin was trading 13% up at almost $12,000 early on Monday

He said: "Bitcoin is the trade of the week and given the massive uncertainty and risk off attitude, I think it is highly likely that Bitcoin could easily top this year's high of $14,000.

"The bitcoin price had several battles with the 50-day moving average during the past few weeks, but finally the bulls have conquered this battle field."