The FTSE 100 dropped 71 points at 5653 after the Easter break as traders reacted to disappointing employment figures out of the US on Friday.
The data showed jobs growth in the world's largest economy slowed to 120,000 in March, well below expectations and the smallest increase since October.
On top of that, there were worrying figures out of China on Tuesday morning. Imports were much lower than expected and growth in exports remained sluggish, painting a gloomy picture for the world's second largest economy.
Fears about the global economy hit the banks hard, with Barclays the biggest faller, down 4% at 210.7p. Royal Bank of Scotland lost 3% to 25p, while Lloyds Banking Group was 3% lower at 30.4p.
Gold miner Randgold Resources was among the few risers, up by almost 9% to £56.08 after the company said disruptions following the military coup in Mali had not materially affected its gold production. Randgold has around two thirds of all its production sites in Mali. The company added that production guidance for this year remained unchanged. Goldman increased its price target on the stock from £55 to £57.
