The London market took a pounding today as banks and other consumer-facing stocks suffered amid fading hopes for a quick cut in interest rates.
Retailers, pub groups and housebuilders were nursing heavy losses after the Bank of England indicated rate cuts were off the agenda while it tries to steer inflation back down towards its 2% target.
With Wall Street's Dow Jones Industrial Average slumping more than 1% in early New York trading due to rising oil prices and lower US retail sales, the FTSE 100 Index shed 85.9 points to close at 5448.6.
Heavyweight mining stocks helped limit the damage in London as they tracked higher commodity prices.
B&Q owner Kingfisher and Marks & Spencer were among the high profile fallers in the top flight - down 10% or 13.8p at 124.6p and 29.75p at 266.25p respectively.
Fashion retailer Next joined the slide, falling 89.5p to 990.5p, with building supplies Wolseley also shedding 37.75p to 417.5p.
Enterprise Inns led the fallers board, losing 11% of its value during a disastrous session for the pubs sector. Shares in Enterprise fell 43.25p to 342.75p, while in the second tier Punch Taverns lost 45p to 323p and JD Wetherspoon dipped 42.25p to 246.75p.
Heavyweight banking stocks were also under pressure after yesterday's credit crunch losses from banking giants UBS and JP Morgan reignited concerns about further pain for their UK counterparts.
Barclays was one of the sector's biggest fallers, down 7%, or 27p at 351.5p, with Halifax Bank of Scotland off 24p at 305p and Royal Bank of Scotland 15.75p lower at 229.75p.
In the FTSE 250 Index, Currys and PC World owner DSG International slumped nearly 20% - or 10.25p to 54.5p - as the beleaguered stock's recent rally came to a juddering halt.
As well as being affected by the retail sector's loss of confidence, shares were also under pressure thanks to analyst notes from JP Morgan and Pali International warning that recent gains for the retailer looked overdone.
Housebuilders were hit by the falling consumer sentiment, with Barratt Developments down 24.5p at 135.5p, a drop of 15%. Persimmon fell 30.5p to 358.75p, while Bovis Homes declined 33p to 424.5p.
In the top flight, miners helped to limit losses on the market as gold prices rose. Anglo American was 112p higher at 2791p while Vedanta Resources added 51p to 1750p and Kazakhmys rose 39p to 1205p.
Broadcaster ITV moved in the opposite direction, losing 10% or 5.1p to 45.4p, after speculation over a possible takeover approach from Dutch firm Endemol started to fade.
The Footsie's four biggest risers were Anglo American up 112p to 2791p, Kazakhmys up 39p to 1205p, Vedanta Resources up 51p to 1750p and BHP Billiton, which closed up 44p to 1512p.
The four biggest fallers were Enterprise Inns down 43.25p to 342.75p, ITV down 5.1p to 45.4p, Marks & Spencer down 29.75p to 266.25p and Kingfisher, which ended the day 13.8p down at 124.6p.