Confidence on the London market was in short supply today as traders around the world took fright at the prospect of a prolonged Iraqi war.
Asian markets set the tone early on as a 4% fall for the Nikkei in Tokyo was followed by a decline of around 100 points for the FTSE 100 Index.
With the Dow Jones Industrial Average forecast to open lower, the FTSE 100 Index remained under pressure at lunchtime – down 74.9 points at 3633.6.
The fall represents the latest retreat by London shares after rallying two weeks earlier on hopes of a brief conflict in the Gulf.
Insurers bore the brunt of today’s weak sentiment with Prudential off 15.75p at 317.25p, Norwich Union owner Aviva down 24.5p at 354.75p, Friends Provident off 3.25p at 77.5p and Legal & General 4.75p lower at 69.25p.
Banks on the slide included Barclays – off 10.5p at 364p, Royal Bank of Scotland 37p lower at 1429p and Abbey National down 11.25p at 334.25p.
And despite another rise in the price of oil, Shell fell 9.5p to 384.75p and BP slipped 9.5p to 404.25p.
Companies with most to lose from a lengthy Iraqi conflict were among the heaviest fallers, with cruise ship operator P&O Princess down 14.5p at 415.25p and FTSE 250 stock British Airways off 4.75p at 103.75p.
Fears of a war-affected spending slowdown among advertisers hit media stocks and Daily Mail & General Trust fell 28.25p to 461.75p, Reuters slipped 6.75p to 102.5p, FT-owner Pearson eased 26.25p to 476p and Reed Elsevier fell 23.25p to 456.75p.
Other blue-chips on the way down included property group Canary Wharf after it announced London Underground had activated a break clause on its Docklands offices.
Shares in the group have been hit in recent weeks by fears of higher vacancy rates and the stock slipped another 6p to 145p today.
Outside the Footsie, one of the most significant corporate announcements came from Durex-to-Scholl company SSL after it said it would sell its medical division.
Shares fell 18%, or 34p to 156p as SSL also revised down sales forecasts.
However, retailer Austin Reed continued to benefit from bid speculation as shares rallied another 3% or 4.5p to 137.5p.
The stock had been at 100p earlier in the year but has been lifted by takeover interest from family-owned firm Slater Menswear and reports that other suitors could be waiting in the wings.