The FTSE 100 index has fallen one per cent at the opening, reacting to a sharp fall overnight on Wall Street, with insurer Royal & Sun Alliance down heavily after results at the low end of forecasts.
By 0820 GMT, the index was down 44.1 points to 4,501.2 after Wall Street plunged 160 points, hit by news of a record US trade deficit.
That news, along with recent weak jobs data has shaken confidence in the US economic recovery.
Royal & Sun shed 11 per cent after news that 2003 profit fell 38 per cent, towards the bottom of forecasts, and news that it set aside more money to pay out claims.
Mobile telecoms company mmO2, recently buoyant on speculation that Dutch telecoms firm KPN would make a fresh bid approach, was down 3.4 per cent. Dealers said the stock was hit by news KPN was undertaking a €500 million share buyback, diminishing a potential takeover war chest.