The FTSE 100 continued its descent this morning, falling by more than 100 points to below the psychologically important 5,000 mark.
Once again, banks and miners were among the biggest fallers as investors worried about the impact of the European and US debt crises and the global economic outlook.
Lloyds Banking Group was among the blue-chip index's biggest decliners, down by 7.7% in morning trading, with Barclays and Royal Bank of Scotland falling 5.9% and 6.2%, respectively.
Among the miners, Xstrata fell by 4.8% to 925p, Rio Tinto was off 4.0% at 3,350p, while Wood Group, the oil services company, was 6.6% lower at 492.23p, after JPMorgan downgraded its recommendation from "overweight" to "neutral". The group also suffered from the declining price of oil, which fell by 1.4% to $105.46 a barrel, on concerns that the global slowdown will dent demand for energy.
Autonomy Corporation, the UK's largest software company, was the biggest of the handful of FTSE 100 risers, jumping by 75% to 2,499 as investors reacted to Hewlett Packard's £25.50-a-share offer to buy the business.
Gold rose by 2.4% to a record $1,867.95 an ounce, as investors sought safe havens for their assets.
After falling by 163 points to a low of 4929.55, the FTSE 100 recovered a little ground, but was still languishing 93 points lower at 4,999 mid-morning. Today's declines follow a 239 point, or 4.5% dive, in the FTSE 100 yesterday.
