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(Alliance News) - Investors fled risk assets on Monday as the weakening of the Chinese yuan overnight set alarm bells ringing, with markets worried the ongoing trade war between the US and China has room to escalate further still. Gold miners gleamed despite the sell-off, with traders flocking to safe haven assets in the wake of the latest US-Sino tensions. The FTSE 100 closed down 183.21 points, or 2.5%, at 7,223.85. This marked the index's worst closing price in two months.The FTSE 250 ended down 381.75 points, or 2.0%, at 18,871.42 on Monday, and the AIM All-Share closed down 14.09 points, or 1.5%, at 907.25.The Cboe UK 100 ended down 2.5% at 12,241.93, the Cboe UK 250 closed down 2.2% at 16,826.05, and the Cboe Small Companies ended 0.4% lower at 10,982.35.In European equities on Monday, the CAC 40 in Paris ended down 2.2%, while the DAX 30 in Frankfurt ended down 1.8%.Markets were rattled at the start of the week after the Chinese yuan breached the CNY7 mark against the dollar, fuelling speculation that Beijing is allowing currency depreciation to counter threatened US tariffs.Overnight, both the onshore and offshore yuan breached the CNY7.0 level against the dollar, which investors see as a key threshold in currency value.In a statement Monday morning, the People's Bank of China said the exchange rate against the US dollar had been "affected by unilateralism and trade protectionism measures and the imposition of tariff increases on China".US President Donald Trump has frequently accused China of artificially devaluing its currency in order to support its exports - charges long denied by Beijing."China dropped the price of their currency to an almost a historic low. It's called 'currency manipulation.' Are you listening Federal Reserve?" Trump tweeted on Monday, calling the currency movement a "major violation".The US president sent ripples through markets last week when he issued a threat of more tariffs just a day after US and Chinese trade negotiators revived talks aimed at ending the year-long dispute.The extra 10% duties Trump threatened to implement from September 1 would mean he has now targeted virtually all of the USD500 billion in goods America buys from China every year."The message is loud and clear. China's retaliation to Trump's additional tariffs shows that China has no intention of surrendering to the US and even goes a step further showing that China too is capable of escalating tensions. China is sounding more willing that ever to call Trump's bluff and that is unnerving traders," said Fiona Cincotta at City Index. Stocks in New York were firmly in the red at the London equities close, with the Dow Jones down 1.9%, the S&P 500 index down 2.0%, and the Nasdaq Composite sinking 2.6%.Glistening amongst the red in London on Monday were gold miners, as the price of the precious metal shot up amid the risk-off attitude. The safe haven asset was quoted at USD1,459.80 an ounce at the London equities close Monday against USD1,445.50 at the close on Friday. Earlier on Monday, gold hit a high of USD1,469.63, its best price since 2013. This led Fresnillo to surge 4.8% to top the ailing FTSE 100, while mid-cap miners such as Centamin, Hochschild Mining and Acacia Mining nabbed the top three spots in the FTSE 250, closing up 3.1%, 3.1% and 3.0% respectively. It was a less upbeat session for Brent oil, quoted at USD60.54 a barrel at the London equities close Monday from USD62.05 late Friday amid the US-China trade worries."China is a major importer of energy and the sour US-China trade relations has dented the energy market," explained David Madden at CMC Markets. This saw oil majors slump, with Royal Dutch Shell 'A' shares closing down 1.7% and 'B' shares down 1.9%, while BP shed 2.1%. Elsewhere in the FTSE 100, Marks & Spencer closed down 5.1% after the retailer concluded the purchase of half of Ocado's retail business.In February, the two FTSE 100 companies formed a 50-50 joint venture, with M&S paying Ocado GBP750.0 million for its 50% stake in the retail business.Ocado Retail will begin selling M&S products on September 1, 2020, unless its current arrangements with John Lewis & Partners-owned Waitrose terminates sooner. Over 6,500 M&S grocery products will be available to Ocado shoppers, the company said.Ocado shares closed down 4.6%.In other retail news, Tesco shares shed 1.6% after the grocer warned of job cuts amid a shake-up at its Metro and Express stores. The supermarket will be simplifying its 153 Tesco Metro stores, cutting down on processes and administrative tasks by introducing faster and simpler ways to fill shelves and storing fewer products in its back rooms so that more stock goes immediately to the shop floor.Additionally, the company will tweak the opening hours of lower-footfall Express stores and simplify stock routines.Overall, "around 4,500" workers will be let go.While HSBC Holdings's interim results were set to be the corporate news of the day, the surprise departure of Chief Executive John Flint stole the headlines. The Asia-focused lender said that Flint's day-to-day duties at the bank will end after Monday but that he will remain "available" to HSBC to assist with the transition to a new boss."In the increasingly complex and challenging global environment in which the bank operates, the board believes a change is needed to meet the challenges that we face and to capture the very significant opportunities before us," said HSBC chair Mark Tucker. HSBC's shock CEO news overshadowed its first-half results, which saw the lender report a 16% jump in pretax profit to USD12.41 billion from USD10.71 billion a year before. Group revenue rose 7.6% to USD29.37 billion from USD27.29 billion the year before.Shares in HSBC closed down 3.0%.Turning to economic news on Monday, the UK services sector put on a surprisingly resilient performance in July. IHS Markit/CIPS Services PMI Business Activity Index registered 51.4 in July, up from 50.2 in June and coming in above the no-change mark of 50 for the fourth month in a row. Consensus, as cited by FXStreet, was for a July services reading in line with the prior month. The latest figure marked a nine-month high, though IHS Markit noted that it was still "well below" the trend recorded since the recovery from the global financial crisis.The pound got a minor bump from the news, quoted at USD1.2143 at the London equities close Monday, compared to USD1.2122 at the close on Friday.The euro, meanwhile, stood at USD1.1188 at the European equities close Monday, up against USD1.1112 at the same time on Friday.This was despite the eurozone's Composite Output Index slipping to 51.5 in July from June's seven-month high of 52.2.The composite score continued to reflect substantial differences in the performances of the manufacturing and services sector. While the service sector rose at a "solid, albeit slightly slower pace", there was an accelerated fall in manufacturing output. And, in the US, growth in the services sector accelerated to signal a solid start to the second half.The Services Business Activity Index registered 53.0 in July, up from 51.5 in June and moving further above the no-change mark of 50. Any reading above 50 indicates expansion, while one below signals contraction.Service providers attributed the rise to greater new business and improved client demand, said IHS Markit. New orders rose at the quickest rate since March, with better foreign client demand leading to a rise in new export orders.In the economic calendar on Tuesday, British Retail Consortium like-for-like sales are at 0001 BST with Ireland's services PMI at 0101 BST. German factory orders are at 0700 BST and the US Redbook index at 1355 BST.In the UK corporate calendar on Tuesday, there are interim results from engine maker Rolls-Royce, Holiday Inn owner InterContinental Hotels Group, takeaway firm Domino's Pizza Group, and office workspace provider IWG.