Footsie falls more than 100 points

The FTSE 100 Index has fallen 110.7 points to 3628.7, its lowest level since August 1, 1996.

Banks, insurers and telecoms are all being hit as fears of military strikes on Iraq added to the concern about the economy.

Fears about bad debts has hit banks with HBOS, down 9% or 59p to 582½p, Royal Bank of Scotland dropping 58p to £11.73 and Barclays sliding 8%, or 29¾p to 336¾p.

Insurers are also falling with Royal & Sun Alliance off 4p to 91½p, Prudential down 13½p at 319½p and Aviva off 6½p to 335p.

Vodafone has fallen 3%, down 3p at 81¼p, and elsewhere in the telecoms sector mmO2 has fallen ¾p to 39p while BT has plunged 11½p to 160¾p.

And oil companies are also slipping back, reversing early gains following a surge in the oil price. BP has fallen 4½p to 428p while Shell has dropped 3p at 374p.

Building materials group Wolseley has suffered on concerns about its US arm and is down 39p to 482p despite strong half-year figures.

Only nine blue-chip stocks are making any progress, among them Morrisons, up 2½p at 212½p and Man, up 34p at £10.05.

Among smaller stocks in London, former FTSE 100 group Electrocomponents has fallen 9%, or 24p to 245p after warning of lower half-year profits.

And Signature Restaurants has dived 11%, or 5½p to 42½p after warning it saw little respite from tough trading conditions in London.