European markets continue to take their cues from China, feeling the pressure in morning trade after heavy selling pressure dragged over from Asia. Ciara Lee looks at what's moving markets, including the latest UK inflation data.
European markets felt the pressure from Asia, with equities edging lower in opening trade. China's trading day saw shares slump six percent on both the main Shanghai Composite and Shenzhen 300 indices - and a broad measure of Asian stocks fell to its lowest in two years. That was despite a relatively calm day in yuan trading. Beijing fixed the exchange rate at a marginally higher level for the third straight session. Seven Investment Management's Justin Urquhart Stewart says it's going to take time before the world's second largest economy is out of the woods. (SOUNDBITE) (English) HEAD OF CORPORATE DEVELOPMENT AT SEVEN INVESTMENT MANAGEMENT, JUSTIN URQUHART STEWART, SAYING: "We're still going to get more figures out of China which will be concerning, particularly possible around the secondary banking market, where they will be acting for further support. And the one thing we should take some confidence in is that China has sufficient reserves to be able to manage this." Better than expected UK inflation data of a 0.1 per cent increase for July pushed the pound higher - and is boosting expectations the Bank of England will raise rates in coming months. But the timing of a rise after years at record lows, will be crucial. (SOUNDBITE) (English) HEAD OF CORPORATE DEVELOPMENT AT SEVEN INVESTMENT MANAGEMENT, JUSTIN URQUHART STEWART, SAYING: "They will all remember, all the central bankers, going back to 36 and 37, as America came out of its depression, they put up interest rates by a little bit. And what happened? The economy went straight back into recession again. No one wants to repeat that." Mining stocks were also hit in early trade. They continue to feel the impact of low oil and commodity prices.