Insurers are coming under pressure after the massive earthquake and tsunami which hit Japan earlier.
Although it is too soon to assess the scale of the damage caused by the quake - which measured 8.9 on the richter scale - the likes of Swiss Re and Munich Re - reinsurers who take on secondary insurance - are down around 5%. A spokesman for Swiss Re said Japan was one of the company's top ten markets.
UK insurers - who recently had to cope with the severe winter (by this country's standards) - are leading the market lower. Aviva is off 10.6p at 450.2p, Legal and General has lost 2.4p to 115.1p and Prudential is 12.5p lower at 722.5p.
Lloyds of London companies are also down, with Catlin off 13.1p at 353p and Amlin 13.5p lower at 392p. Joshua Raymond, market strategist at City Index, said:
Insurers have been worst hit by the weaker session today as traders fretted about likely exposures to the Japanese earthquake and tsunami. Insurers have seen strong bullish price movements lately, with the sector rallying nearly 30% since the start of December last year. The destruction in Japan is convincing investors to cash in some of their gains.
Overall though the UK market's losses have been contained, with the FTSE 100 down 22.04 points at 5823.25 despite a 1.7% drop on the Nikkei 225 (although much of this came ahead of the news of the earthquake.)
Miners have been lifted by the latest Chinese inflation figures, which showed a 4.9% rise in February, in line with the January increase. Cynically, there will probably also be increased demands for commodities when Japan begins rebuilding from the quake.
So Rio Tinto has risen 58.5p to £39.90, while Xstrata is up 13.5p at £13.61.
A major disaster, as bad as it is for Japan, was also the last thing investors needed given the current global situation. Not only is the turmoil in Libya continuing, with further worries about Saudi Arabia and the Middle East, but Europe's debt problems are firmly back on the agenda after downgrades to Spanish and Greek debt and concerns about Portugal needing a bailout. Today sees an EU economic summit where investors will be looking for some leadership and decisions about these issues.
Later come US retail sales figures and consumer confidence, with the latter showing the effect of rising oil prices on people's expectations.
