Growing concerns over the US economy and the impact of rising levels of defaults on sub-prime mortgages sent global stocks sharply lower today.
The FTSE 100 Index was down 111.3 points at 6049.9 by mid-morning, led by financial and mining stocks.
The slide follows heavy falls on the US and Asian markets overnight after continued worries about the state of the sub-prime mortgage market in the US sparked fears over the future of the world’s biggest economy.
HBOS led the decline, with a fall of 54p to 1025p, while Royal Bank of Scotland fell 79p to 1969p and Barclays lost 24.5p to 681.5p. HSBC, which recently issued a profits warning after facing problems with its US mortgage business, was down by nearly 2%, or 17p, to 885.5p.
Meanwhile fund managers with exposure to US markets continued yesterday’s slide with Man Group losing 20.25p to 493p and Amvescap falling 17.5p at 569p.
On the up side, Home Retail Group rose 13.75p to 435.75p as it said it now expected to post results ahead of expectations after sales grew at both its Argos and Homebase chains in the last few weeks of the year.
It was B&Q-owner Kingfisher that seemed to benefit from news of the upturn in the home-improvement market as it topped the risers’ board with a gain of more than 5%, or 12.75p to 263p.
Rumours of private-equity interest added a further boost to the stock, while Sainsbury’s also rose, up 7.25p to 528.25p, after news that the CVC-led consortium had approached the retailer offset concerns that a bid could be scrapped.
Anglo American led the mining sector lower with a loss of 97p to 2385p, with Xstrata slipping 90p to 2277p, Lonmin down 110p to 2895p and Kazakhmys dropping 39p to 1083p.
Insurer Legal & General fell more than 4%, or 6.25p, to 147.5p, despite posting a 13% rise in operating profits to £1.23bn (€1.8bn) in a strong set of annual results. More Than insurer Royal & Sun Alliance was also off 6.25p to 157.75p.