The FTSE 100 has suffered record losses not seen since the aftermath of the Brexit vote.
UK shares plunged following the arrest of a top Huawei executive that renewed fears over tensions between China and the US.
A staggering 3.2 per cent was wiped off the FTSE on Thursday in its worst day of trading since Britons voted to leave the EU in June 2016.
The midcap FTSE 250 was down 2.8 per cent, with domestically focused stocks slightly less affected than the wider European market.
It comes ahead of a crucial Commons vote on Prime Minister Theresa May’s Brexit deal next Tuesday.
Losses on the British blue-chip index were in line with European peers with falling oil and commodities prices hitting heavyweight oil and mining stocks.
The oil and mining sectors were down 4.5 percent and 4 percent respectively as OPEC ended a key meeting without making a decision on crude output.
Industrial metals prices also fell, and copper hit a three-week low after the arrest of Chinese smartphone maker Huawei's chief financial officer.
Meng Wanzhou’s arrest dampened hopes for resolution to the ongoing US-China trade conflict.
"The Huawei arrest appears to be the straw that broke the camel's back", wrote Connor Campbell, an analyst at Spreadex.
"The rapidly dwindling good-feeling towards the U.S. and China's vague trade war ceasefire turned actively hostile on Thursday, investors fearing that, 90-day truce or not, the relationship between the two superpowers might be about to take a turn for the worse," he said.
Agencies contributed to this report.
