Overnight the US and its allies carried out a first wave of airstrikes against IS targets in Syria. Although there is a broad coalition in place those attacks are being carried out, after all, in an independent state whose long-term aims may not be the same as those of the coalition. Hence, there is plenty of potential for “unintended consequences”.

As of 09:11 the FTSE 100 was trading 19 points lower at 6,657.

“Global markets continue to move lower for a third day today, as the threat of a drawn -out campaign against the ‘Islamic State’ becomes ever more likely,” said Alpari UK market analyst Joshua Mahony.

Also weighing on sentiment in the early going was the latest reading on the business climate in Germany. The IFO Institute’s business climate gauge slipped to a reading of 104.7 in September from 106.3 in the month before (consensus: 105.8).

“With European markets already reeling from a raft of PMI figures yesterday which saw French services and manufacturing in contraction, whilst German manufacturing gets ever closer, the release of yet further negative data this morning could compound the weakness seen overnight and lead to a third day of losses in Europe,” Mahony said before the release of the report.

Acting as a backdrop, Goldman Sachs economists have revised their forecast for China’s economic growth this year lower, to a projection of 7.1 per cent versus 7.6 per cent before.

RBS bows to pressure

Royal Bank of Scotland has announced the pricing of the $3.4bn flotation of its US arm Citizens Financial Group. RBS said it planned to sell a quarter of the shares in Citizens at a price per share of $21.50 – bowing to pressure from investors to lower its price – and a further 3.75 per cent in an over-allotment option, raising up to $3.46bn.

Back in the UK and in company news, water group United Utilities remained tight-lipped on negotiations with regulator Ofwat over its future price structure, but said first-half profits were at a similar level to last year’s. As in the first quarter, revenue increased due to its allowed regulated price rise, but was offset by the impact of a customer discount, an increase in depreciation and other cost pressures.

Tiling retailer Topps Tiles forecast higher sales and profits after what it described as an excellent year’s trading. Topps said revenue in the year to 26 September should be about £195m against £177.8m a year ago. Like-for-like revenues are expected to increase about 8% on the prior year, when they fell 0.5 per cent.

WPP, one of the world’s largest advertising groups, has announced it intends to invest in Polestar, a start-up Chinese e-commerce service company. WPP will take a minority stake in Polestar, which will be led by its principal investors and which has also secured partnerships with Chinese and international brands.