SHARES dived on the FTSE 100 Index as a surge which threatened to take it to an all-time high was cut short following poor economic figures from China.

Comments from Federal Reserve chairman Ben Bernanke that policymakers could slow the pace of their support in the next few months also spooked markets, with the FTSE 100 down by 2.1 per cent or 143.5 points to 6696.8.

Despite the fall, which wiped £36.6bn off the value of shares, the top flight is still up by about 14 per cent this year. The poor update from China came after its manufacturing sector fell into contraction territory this month, following months of slowing growth.

Losses were felt across the board in London, with Lloyds Banking Group ending a recent strong run with a fall of 2.3p to 60.6p, Barclays dropping 12.4p to 321.4p and Royal Bank of Scotland off 12.4p to 337.2p.

Chip designer Arm Holdings, whose technology is used in Apple products, was one of the biggest fallers with a decline of five per cent or 55p to 995p.

The utility sector was the most resilient in the FTSE 100 as a flight to safety combined with strong numbers from United Utilities and ongoing bid speculation propped up the sector.

North-West water supplier United increased profits by eight per cent to £354m. Shares were 6p higher at 787.5p.

In the FTSE 250 Index, car parts and cycling retailer Halfords fell by nearly 16 per cent as it cut its dividend in order to preserve cash for its £100m turnaround strategy.

It also announced a 22 per cent drop in full-year profits to £71m. Shares were down 63p at 333.3p.

Fellow retailer Mothercare was under pressure, despite an improvement in underlying profits. Boss Simon Calver hailed progress in the firm’s three-year turnaround, but shares still fell 9p to 354.8p after UK losses only narrowed by £3m to £21.7m.