FTSE sent sharply lower as China battles inflation

The FTSE has dipped 1% after a steady morning session as sentiment was hit following China’s move to curb rising inflation in the country.

Although stopping short of an actual interest rate rise, China today moved to raise banks' reserve requirements by 50 basis points, the fourth such move in two months.

London's leading index is down 1.08% at 5,958.97, with miners, reliant on commodity-hungry China, feeling the pinch.

Fresnillo fell 3.92% to £14.97, Xstrata is down 3.7% at £14.57 and Anglo American is down 3.61% at £32.87.

However, ARM Holdings is up 6.94% at 539p, benefiting from fellow chipmaker Intel's impressive results yesterday.

European markets have followed London's lead, with the Cac down 0.35% at 3,960.83 and the Dax down 0.5% at 7,039.48.