European markets have been jittery again today following the release of two sets of key data relating to the Chinese economy.

The pan-European STOXX 600 traded 2.7 percent lower in mid-morning trade.

Germany's DAX was down 2.8 percent, while in London the FTSE 100 was 2.5 percent lower and France's CAC had dropped by nearly 2.7 percent.

China’s official manufacturingpurchasing managers’ index (PMI), dropped to 49.7 in August from 50 in July. Readings below 50 indicate that the sector has begun to contract. Factory output in China has now reached a three-year low.

Caxin released a separate survey of China’s smaller factories today showing to a six-year low. The Caixin/Markit manufacturing purchasing managers' index (PMI) came in at 47.3 in August, above a preliminary reading of 47.1 but down from 47.8 in July.

Earlier today Asian stock markets fell across the board.

Speaking in Indonesia today, Christine Lagarde, head of the International Monetary Fund, sent out a warning to emerging economies to brace themselves for further market turmoil.

“As the Chinese economy is adjusting to a new growth model, growth is slowing—but not sharply, and not unexpectedly. The transition to a more market-based economy and the unwinding of risks built up in recent years is complex and could well be somewhat bumpy. That said, the authorities have the policy tools and financial buffers to manage this transition.

“Other emerging economies, including Indonesia, need to be vigilant to handle potential spillovers from China’s slowdown and tightening of global financial conditions.”