This slump had already sparked yet another slump for Japan’s stock market.

China’s manufacturing industry, one of the biggest drivers of economic growth for the country, contracted in May due to deteriorating demand.

The country’s manufacturing purchasing managers’ index (PMI) stood at 49.2 for May, worse than the initial 49.6 estimate, and below April’s 50.4 reading.

Any reading below 50 means the sector is contracting.

The disappointing data weighed on Asian markets overnight, prompting another sharp fall for the Nikkei which fell 3.7% to 13,261 amid fears a slowdown in Chinese manufacturing could derail global growth.

This morning losses have been mirrored by European markets in early trading.

The FTSE 100 was down 1% or 68 points at 6,514 shortly after opening, continuing to pull back from the high of 6,800 seen just two weeks ago.

European markets have also started the week in the red; the German Dax is down 1.2% to 8,249, while the French Cac has also given up 1.2% to 3,902.