US stock markets slump at start of 2019 – as it happened

Growth concerns in focus after worst year for US equities since crash

• UK factory output jumps as stockpiling increases amid Brexit fears
• Bleak start to 2019 for markets after weak China data
• John Lewis sales benefit from late Christmas rush

3.12pm GMT

Shares have fallen in the US, Europe and Asia as the pre-holiday sell-off resumed following weak Chinese manufacturing data - renewing the focus on fears that the global economy will weaken in 2019.

In London the FTSE 100 has rebounded from steeper losses earlier in the day. The blue-chip index is now down by 0.3%. The mid-cap FTSE 250 is down by 0.1%.

Related: Markets dive as China manufacturing weakens in bleak start to 2019

Related: Factory output jumps as stockpiling increases amid Brexit fears

2.34pm GMT

In the first few minutes of trading on Wall Street in 2019 the S&P 500 lost 1.4%, while the Dow Jones industrial average dropped by more than 350 points, or 1.6%.

US markets fell to their biggest annual loss since 2008 during the course of 2018, and started 2019 on a similar footing.

2.24pm GMT

In case anyone thought that the new year's eve bounce on US stock markets was a good sign, Allianz's chief economic adviser:

Good morning.
Weakness in US #stocks -- #Dow futures are indicated down over 400 points, consistent with lower #markets in Asia and Europe--bolsters the view that Monday's bounce was just the result of one-off re-balancing #trades rather than a durable change in investor dynamics

2.12pm GMT

Approaching the US open and futures are still pointing to a painful session for investors in American companies.

S&P 500 and Dow Jones industrial average futures are both down by 1.6%. Nasdaq futures are down by 2.2%.

2.02pm GMT

Tesla has disappointed analysts after it reported that production in the final quarter of 2018 - at nearly 1,000 vehicles per day - came in lower than market expectations.

The electric car maker founded by Elon Musk produced 86,555 vehicles in the three months to the end of the year, up 15% compared to the previous quarter. Shares fell by around 7% in pre-market trading.

1.44pm GMT

Sterling is now down by more than 1% today - the holiday has done little to add any festive cheer with Brexit ahead.

"The pound's cheap, but for excellent reasons," notes Kit Juckes, chief global foreign exchange strategist at Socii(C)ti(C) Gi(C)ni(C)rale. "FX is [currently] a battle between a host of unloved currencies to see which is worst."

1.27pm GMT

Good news for vegans in search of reasonably priced hot snacks: bakery chain Greggs is planning to launch a no-animal-products sausage roll this week.

1.19pm GMT

After a painful first morning of 2019, at lunchtime the sell-off has eased somewhat across Europe's main stock markets - although there is still a sea of red.

The FTSE 100 is down by 0.66%, in line with the mid-cap companies on the FTSE 250. Next and Ocado continue to hold up the top end of the FTSE 100.

1.00pm GMT

Here's more detail on manufacturing firms' Brexit stockpiling:

In a sign of mounting stress for the British economy as the impasse in Westminster over Brexit continues, the stockpiling of finished goods increased at the second-fastest rate since 1992, writes Richard Partington.

Related: Factory output jumps as stockpiling increases amid Brexit fears

12.53pm GMT

US markets are expected to follow Europe down, according to futures prices an hour and a half before the opening bell.

Futures for the S&P 500 and the Dow Jones Industrial Average are both down by 1.2%.

Key drivers of an equities bear market will be Brexit uncertainty, further tightening of monetary policy on both sides of the Atlantic, political gridlock and trade tensions - all forcing equity values lower in the UK, Europe and the USA.

12.30pm GMT

John Lewis's enjoyed a strong finish to a rollercoaster Christmas trading period banking a bumper sales fortnight as shoppers made a late dash to the shops, writes Zoe Wood.

Related: John Lewis sales benefit from late Christmas rush

12.00pm GMT

Some nice perspective on the rail fares rises here from Sky's economics editor, Ed Conway.

Consumer price index (CPI) inflation is the most widely used measure of the cost of living.

Cumulative changes since 1995
CPI inflation: 62%
RPI inflation: 95%
Regulated rail fares cap: 105% pic.twitter.com/XazK0pCbvY

11.56am GMT

Gold prices have hit a six-month high as the equity sell-off prompts investors to look for safe havens.

Spot prices for the yellow metal hit highs of $1,288.66 per ounce on Wednesday, the highest since June 2018.

11.31am GMT

The new year festivities always come with a painful hangover: rail fare rises. Commuters across the country have today staged protests as fares rise by 3.1%.

Related: Rail fare increases prompt protests at stations across UK

11.18am GMT

The Brexit stockpiling boost to the manufacturing sector has failed to cheer up currency traders, who have sold off the pound against the US dollar.

When Theresa May comes back with those reassurances that she has been seeking from the EU that the deal that is on the table is not going to lead to us being permanently trapped in the customs union ... she will find a way to get this deal through parliament.

11.02am GMT

Some more reaction to the UK's manufacturing PMI data. The main verdict? While the headline may look encouraging, be wary.

The marked increase was driven by stockpiling of goods and raw materials in preparation for possible disruption if there is no Brexit deal by 29 March. Stocks built now will have to be run down eventually, potentially lowering demand in future months.

It's worth remembering that the manufacturing sector makes up a relatively limited share of economic output - around 10% of GDP. More importantly, warehousing is in relatively short supply, leaving firms with fairly limited scope to boost inventories.

The absence of any New Year joy from the European PMI data also confirms that the near future holds a bumpy ride for UK manufacturers.

10.44am GMT

Department store chain John Lewis has reported that sales rose by 4.5% in the week to 29 December, while sales at its Waitrose supermarket surged by 19.2%.

The firm is one of the first major British retailers to reveal its Christmas performance, at a time when analysts are nervously looking out for more pain on the high street.

Related: John Lewis reports record sales in Black Friday week

10.32am GMT

A quick check-up on the FTSE 100 after the manufacturing data beat expectations: the sell-off has slowed slightly, but miners remain under pressure.

The benchmark index is now down by around 60 points, or 0.9%, with betting company GVC Holdings and grocery logistics company Ocado vying for the top spot - both are up by around 2.6%. Next shares are now up by 1.8%.

10.12am GMT

ITV's chief financial officer stepped down from the board on new year's eve.

The FTSE 100 broadcaster had announced in June that Ian Griffiths, who also held the role of chief operating officer, would retire within 12 months.

10.04am GMT

Brexit uncertainty may actually be helping British factories weather slowing global growth - although it is an irony not many major manufacturers would appreciate.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: "The pick-up in the PMI in December suggests that preparations for Brexit are helping manufacturers to keep their heads above water during the current global slowdown."

December's PMI doesn't alter our view that the manufacturing sector will struggle over the coming months and that GDP growth will be well below-trend in Q4 and Q1; we expect quarter-on-quarter growth of 0.2% and 0.3%, respectively.

9.58am GMT

Factories are stockpiling the raw materials they need for their work as well as the products they sell as they prepare for possible disruption.

BREXIT STOCKPILING LATEST

" UK factories' stocks of finished goods rise at 2nd fastest rate since records began in 1992 - PMI
" Stocks of materials purchased rise at 4th fastest pace on record https://t.co/Szwm2ZfaJo pic.twitter.com/CtjKDQPKlQ

9.56am GMT

The overall reading for British manufacturing showed the fastest expansion in six months for the sector. Unsurprisingly, it's Brexit which is seen as the driving force.

Growth in new orders rose to a 10-month high, with inflows from domestic and foreign buyers. IHS Markit said:

Manufacturers linked increases in both domestic and overseas demand to clients purchasing to build up safety stocks to mitigate potential Brexit disruption.

9.33am GMT

UK manufacturing activity came in significantly higher than expected at the end of 2018 thanks in part to a steep rise in stockpiling ahead of Brexit, according to a closely followed survey.

The manufacturing purchasing managers index rose to 54.2 in December, up from 53.1 in November, data firm IHS Markit reported. Economists had expected a slowdown to 52.5.

The rise in the PMI level during December was mainly driven by stronger inflows of new business and a solid increase in stocks of purchases. Movements in both mainly reflected Brexit preparations by manufacturers and their clients.

9.22am GMT

The European Central Bank has been busy celebrating 20 years of the euro this new year, but today it was forced to announce less pleasant news: Italian lender Banca Carige has been put in administration.

9.08am GMT

Eurozone manufacturing activity has fallen back from boom time a year ago to "near stagnation" now, according to Chris Williamson, chief business economist at IHS Markit.

December saw the third consecutive drop in new orders, in an onimous sign for the eurozone economy. Williamson said:

The weakness of the recent survey data in fact raises the possibility that the goods producing sector could even act as a drag on the overall economy in the fourth quarter, representing a marked contrast to the growth surge seen this time last year.

9.04am GMT

The eurozone manufacturing purchasing managers index (PMI) fell to 51.4 in December, the lowest since February 2016.

There is likely to be little relief for European stocks from manufacturing figures, with IHS Markit's barometer coming in at the consensus, but with a notably weak reading for future output.

9.01am GMT

At the other end of the scale, there's Debenhams.

The department store is one of the most shorted shares on the London Stock Exchange. That bet would have paid off handsomely over the last year: shares were worth 35p a year ago; now you'll pay only 4.8p after another 6% slide today.

8.49am GMT

An interesting and unlikely top gainer amid a steep FTSE 100 sell-off: a British retailer.

Next is the second top riser amid London's blue-chip stocks, with a 0.6% gain.

8.31am GMT

We seem to be set for a bad day across the eurozone as well - unless manufacturing data can give investors some cause for excitement.

It's a sea of red across European markets, with France's Cac 40 suffering a particularly nasty 2.3% sell-off.

8.23am GMT

And it's an unhappy new year from the FTSE 100 too, with more than 100 points knocked off at the open.

8.07am GMT

Here's more detail on what is already shaping up to be the big story of 2019: whether global growth is dragged back by a slowdown in China.

Today's Chinese data underline concerns that the world's second largest economy is "heading for a tough 12 months", writes Martin Farrer in his report.

Related: Markets dive as China manufacturing weakens in bleak start to 2019

7.56am GMT

Happy new year, and welcome to the first business live blog of 2019, with rolling coverage of the world economy, financial markets, the eurozone and business.

The report implies deteriorating demand, with production likely to reflect that in coming months. Leading indicators suggest that activity is unlikely to begin a recovery until the second half.