Miners and banks are leading the way down as the market heads lower for the third day in a row.
It was always going to be a nervous start, given that Asian markets slumped overnight after Wall Street's 345 point fall. The Nikkei 225, for example, ended 2.75% lower.
The US decline was partly attributed to poor employment numbers, ahead of today's key non-farm payroll figures (although see Blogging Stocks for the argument that no one really knows what is behind the decline.)
At one point this morning, the FTSE 100 was down more than 100 points, although it has since calmed down a little and is now 61.6 points lower at 5300.5.
Fears of a global slowdown have hit the miners, with Ferrexpo down 18p at 180p. The company is due to lose its position in the leading index next week.
Banks continued to be unsettled by the European Central Bank's new restrictions on the use of its liquidity funds. Barclays is down 13.25p to 316p, not helped by a sell note from Collins Stewart.
The broker said: "Barclays' Bob Diamond is hosting a seminar of the half of the group he runs – investment banking & investment management, or BarCap and BGI as they are better know. We feel he will have a very tough audience. At group level, UK impairments, capital strength, the "revenue floor" in BarCap, further write-down potential and attitude to deleverage are all key issues.
"Barclays has been less forthcoming than some peers (e.g. RBS) with the levels of marks it has taken on assets, repeating the mantra that 'risk is not generic'. This may well be so but doubt the market will give the bank much credit for this. We remain concerned about some big numbers on the balance sheet, for example the £5bn of leveraged finance and £11bn of commercial mortgages left. More data on marks would be well received."
Gloom may abound but there is still the odd takeover tale around. After the Exxon Mobil for BG rumour yesterday, which has lifted the gases group another 5p to £10.60, comes renewed speculation around RSA Insurance, 3.89 better at 162.2p. Volumes have been quite hefty in RSA in the last few days. Zurich Financial Services, Swiss Life and Generali have both been mentioned as possible predators in the past.
