The FTSE 100 index is a sea of red with not a single gainer among the blue-chip stocks after the collapse of Lehman Brothers and the surprise rescue deal between Wall Street stalwart Merrill Lynch and Bank of America.
Banking stocks have been hit hardest with HBOS losing more than 15% at 237.5p and Barclays down more that 8% at 321.25p. Royal Bank of Scotland is down 7% at 216.5p with ICAP down over 6% at 455p and Man Group down almost 7% at 479.25p.
Insurers are also heading lower on fears that America's largest insurer - and Manchester United shirt sponsor - AIG is in serious trouble having asked for $40bn (£22.2bn) from the Fed.
Prudential is down more than 8% at 506p with Friends Provident down 8% at 90.6p.
Thomson Reuters is falling rapidly on the expectation that it will see sales of its financial news and trading terminals plummet as its banking clients collapse or merge. The shares are down 119p at 1400p.
Mining and commodity shares are losing ground as the financial turmoil is expected to increase recessionary pressures on the global economy and further depress demand for metals and minerals.
Cairn Energy is down almost 7% at 177p with miner Eurasian down 51.5p at 670.5p.
