The biggest sell-off on Wall Street since 2003 and oil prices moving within a whisker of an all-time high cast gloom over the London market today.
The FTSE 100 Index dropped 16.1 points to stand at 5656.3 by mid-morning, with losses being felt across a range of sectors.
Trading was taking place for the first time since the Dow Jones Industrial Average slumped more than 213 points on Friday to lose hold of all its gains so far this year.
Investors were also unsettled by the cost of crude rising above $69 a barrel for the first time since the end of August on fears of supply disruptions in Iran and Nigeria.
Heading a long list of losers in London were online poker firm PartyGaming - down 4.75p to 138p – and pallet supplier Brambles Industries, weakening 9.5p to 415.75p.
Among the banks, Barclays drifted 3.5p to 594p even though it was named by heavyweight broker Merrill Lynch among its top picks in the sector.
Investors were alarmed at disappointing fourth quarter earnings from Citigroup in the United States, leading them to sell off UK rivals with a large overseas presence.
HSBC fell 15p to 928p, Standard Chartered eased 20p to 1377p and Royal Bank of Scotland was on the slide – down 10p to 1726p.
But some assistance was provided by mobile phone firm O2 – up 0.5p to 199.75p - after it told the market that it had signed up 1.75 million customers in the final three months of 2005.
Because the share price of O2 is supported by the £17.7bn (€25.7bn) offer from Telefonica, a better signal of sentiment was provided by Vodafone which gained 1.75p to 119.75p ahead of an update on its third-quarter performance tomorrow.
Elsewhere in the telecoms sector, BT Group lifted 3.25p to 207p, but Virgin Mobile was 5p lower at 257.75p in the FTSE 250 Index as investors await progress on talks with suitor NTL.