END-OF-DAY REPORT: Headline shares slumped to triple-digit losses by the close, as the FSA report on RBS failings rattled investors in banks, and with resources stocks hit by weakening metal and oil prices.
At the close of business, the FTSE100 was down 101.35 points at 5,427.86 with the FTSE250 off 229.42 points at 9,901.15 and the FTSE Smallcaps 26.61 points lower at 2,718.34.
US stocks suffered heavy losses in late morning trade, investors spooked by Moody's placing all Eurozone countries credit ratings under review and disappointed to hear Intel has cut its revenue forecast for the last quarter of the year.
Heading into the close in London, the Dow Jones Industrial Average was down 174 points at 12,011, the S&P500 lost 21 points at 1,235 and the Nasdaq Composite fell 42 points at 2,605.
A quiet day for corporate earnings news shifted investor focus to the FSA report on the systemic failings leading to the demise of RBS, while news that rating agency Moody's had placed Eurozone countries under review accelerated losses in the afternoon session.
Mining stocks were led lower by ENRC on reports it is in talks with the SFO over corruption allegations. ENRC shares tumbled 50.5p at 634.5p.
Elsewhere in the sector, weakening metals prices took their toll, with Xstrata down 56.1p at 955.4p and Kazakhmys 63p lower at 880p.
Oil producers fell as WTI crude dived towards $98 a barrel, with Shell down 31p at 2,325p, BP off 7.5p at 444.55p and BG Group 24p lower at 1,324.5p.
Banking stocks suffered at investors digested the FSA report into the failures at Royal Bank of Scotland. RBS shares dipped 1.43p at 20.56p, Lloyds slumped 2.29p at 24.43p and Barclays dropped 8.75p at 181.45p.
Insurers followed the example, with Aviva losing 20.3p at 301p, Prudential down 30.5p at 624p and Legal & General 3.8p lower at 102.7p.
Reports of flagging sales in London's West End added pressure to the retailers, with Burberry off 46p at 1,217p and Marks & Spencer down 3p at 312.3p. Meanwhile, down the list, babywear specialist Mothercare jumped 7.4p at 168p on reports it is the subject of bid interest from private equity group Cinven.
Publishing group Pearson lost 16p at 1,128p on news it has disposed of its 50% stake in FTSE International to the London Stock Exchange for GBP450m. LSE shares dropped 40p at 780p in response.
Engineering groups were down on concerns over the effect of EU isolation, with industrial pump maker Weir Group slipping 72p at 1,893p, IMI off 6.5p at 724.5p and automotive specialist GKN 7.6p lower at 178.7p.
On the limited upside with blue chips, cigarette maker Imperial Tobacco jumped 12p at 2,363p on news it has won its appeal against the OFT's GBP£112m fine for price-fixing, while rival BAT added 1.5p at 3,000p as its defensive qualities came into play.
Drinks giant Diageo rose 14p at 1,374p as investors sought solace, the best blue chip of the day.
SharePrice.com will do their best to ensure the quality of the information displayed on this site, but all information is provided as-is. We cannot be held responsible for any loss, material or otherwise, due to incorrect information found here. All share prices are provided by the London Stock Exchange, and are at least 15 minutes delayed.