Talk that the turning point in the stock market has been reached is growing louder, with the FTSE 100 now down 2% and indices in France and Germany even harder hit.
US futures also point to a drop on Wall Street when the opening bell tolls later, with traders expecting stock markets there to track the sell-off in Asia overnight. The DAX in Germany is down 2.3% and France's CAC 40 is down 2.6%.
The FTSE 100 is down 94.4 points, or 2%, at 4619.6 - adding to losses of 41.5 points on Friday when a surprisinly low reading of US consumer sentiment rocked confidence in the global economic recovery. If US markets do indeed fall this afternoon and with little corporate or economic news due in teh UK to offer any support, the FTSE looks on track to record is biggest daily loss for six weeks. The last time the FTSE fell more than 2% in a day was July 2.
Further down the market, housebuilder Barratt Developments is one of the biggest lowers in the FTSE 250, down 6.2% at 225.2 after a report in the Mail on Sunday claimed that it was considering a rights issue to raise £500m. The company declined to comment on the report.
Rival housebuilders are also lower. Taylor Wimpey - which launched its own rights issue earlier this year - is down 3.9% and Bovis Homes Group is down 4.6%.
