LONDON - FTSE 100 Index, British benchmark stock market gauge, Monday dropped by 1.13 percent, or 74.68 points, to 6,505.13, as China stock market's slump dragged the performance of European stock markets.

The benchmark Shanghai Composite Index plunged 8.48 percent to close at 3,725.56 points, its sharpest daily drop since February, 2007. The smaller Shenzhen Component Index fell 7.59 percent to close at 12,493.05 points. Around 1,800 shares fell by the 10-percent daily limit.

Investors are keeping concerned prior to the US Federal Reserve's monetary policy announcement on Wednesday, or July 29, said analysts here.

Pearson decreased by 4.76 percent, topping the losers of the blue chips.

Prices of Merlin Entertainments, Sage Group, 3i Group and RSA Insurance Group dropped by 4.28 percent, 3.79 percent, 3.31 percent and 3.16 percent respectively.

Bunzl led the top gainers of the blue chips with a share price increase of 1.70 percent, followed by Reckitt Benckiser Group (1.44 percent), Randgold Resources (1.34 percent), Fresnillo (1.13 percent) and Centrica (0.66 percent).

Trading volume in FTSE 100 companies was around five percent smaller than its 30-day average. And the index has gained 1.33 percent so far this year.