Stocks across Europe, the U.S. and Asia tumbled after China's Shanghai Composite tanked to close 8.5 percent down at a three-week low. This added to the sharp losses seen by the index in recent weeks as the fall in commodity prices saps risk appetite.
Declines in the Shanghai Composite quadrupled during its afternoon session, as official data showed China's industrial profits declined 0.3 percent year-on-year in June, after rising in April and May.
Earnings season continued in Europe, with some companies warning of the impact of the slowing Chinese economy. These included French autos supplier Valeo on Monday, which closed 5.4 percent down at the bottom of the CAC after releasing its first-half earnings.
The FTSE's weakest performers were Pearson and Merlin Entertainments.
The former closed down 4.8 percent after confirming it was in talks to sell its 50 percent stake in The Economist, having announced the sale of the Financial Times Group to Nikkei last week.
Merlin Entertainments shares, meanwhile, closed down 4.3 percent after a profit warning was released. Its shares tumbled as much as 7.8 percent in early trading, its worst ever one-day drop.
Better news came from Swiss banking giant, UBS, which reported better-than-expected earnings. However, shares in the bank closed down around 1.6 percent. UBS results came a day earlier than expected, following a report in Swiss paper Sonntagszeitung.