Commodities companies are the leading fallers so far after drops in oil and metals prices. This follows overnight declines in America, and is again based on concerns about what happens to demand for commodities if the US, and by extension, the rest of the world goes into a prolonged recession.
So with oil in danger of slipping below $100 a barrel and gold and other metals lower, miners dominated the FTSE index. Vedanta Resources is the biggest faller, down 136p to £18.74. Anglo American, Kazakhmys, Antofagasta, BHP Billiton and Rio Tinto were all down around 4%.
Ryan Kneale, market analyst at City bookmaker BetsForTraders.com, said: "The European markets have got off to a shaky start again today after a negative outlook from German insurer Allianz, a profit warning from Credit Suisse and lower commodity prices have made it very difficult for traders to be positive.
"Our clients have been quick to bet against mining giant Rio Tinto. We have seen treble the daily average number of bets being placed this morning alone and people are still betting now. Of the bets taken today a staggering 86% of them are betting on a fall in Rio Tinto's share price."
With US unemployment claims rising 22,000 last week to a higher than expected 378,000 - another recession indicator - the FTSE 100 is now 59.6 points lower at 5486.0.
