European stocks tumbled at the open on Thursday, with commodities also under heavy pressure on mounting concerns over US monetary policy and the renewed spread of coronavirus.

Major bourses across the region slid in early trading, with London’s FTSE 100 dropping about 2 per cent. The broad Europe Stoxx 600 fell 1.4 per cent with Frankfurt’s Dax off 1.3 per cent and the Cac 40 in Paris down 1.8 per cent.

Traders also shifted out of other risky asset classes, leaving oil and industrial metals prices with significant declines. Copper, the world’s most important industrial metal, dropped 2 per cent to a five-month low below $9,000 a tonne.

The gloomy trading session, which followed a 1 per cent drop on the US S&P 500 overnight, came after minutes from the Federal Reserve’s July policy indicated a majority of policymakers were prepared to begin easing the central bank’s vast stimulus programmes later this year.

The Fed’s $120bn a month in asset purchases has been a key pillar in a global market rally from the depths of the coronavirus crisis in March 2020. However, as the US labour market has rapidly improved and inflation has risen sharply, central bankers are now planning their exit from the extraordinary measures.

“Undeniably one of the factors buoying markets all year has been the $120bn every month,” said Fahad Kamal, chief investment officer at Kleinwort Hambros, Société Générale’s private banking division. “Clearly, with tapering getting closer people are worried.”

Indications that the Fed will begin tapering quantitative easing have come at a time of rising anxiety over a deceleration in growth in China, the world’s largest consumer of raw materials, as coronavirus spreads across the Asian region and supply bottlenecks hamper output in key sectors. Concerns about weakening demand in China led to a fall in mining stocks, with Rio Tinto and Glencore both down more than 3 per cent.

Concerns over the Delta coronavirus variant have also been heightened by a new study published on Thursday which found that protection gained from the BioNTech/Pfizer shot declined more rapidly than from the Oxford/AstraZeneca jab. The stock of airline companies, including British Airways parent International Airlines Group and easyJet, slid on the back of the continued uncertainty.

Investors have begun adopting a more defensive posture in recent weeks, according to data tracking flows to exchange traded funds. Global share markets have posted sizeable gains this year, with the broad MSCI All-World barometer up about 12 per cent.

However, some fund managers have become worried over how much further markets will rise, particularly after a blockbuster corporate earnings season set a high bar for the remainder of 2021.

Asian markets, which faced a sharp sell-off earlier in the week following weaker than expected data out of China, also fell. The Hang Seng lost 2.5 per cent. There were significant losses in several pharmaceutical companies, including CSPC Pharmaceutical Group, WuXi Biologics and Sino Biopharmaceutical, as concerns remained around the efficacy of Covid vaccines manufactured in China.

Outbreaks of the Delta variant in south-east Asia coupled with microchip supply issues caused Toyota to reduce its global production for September by 40 per cent from its previous plan.

The dollar strengthened significantly in morning trading. The pound slid 0.4 per cent against the dollar to $1.37, while the euro was down 0.1 per cent at $1.1729.