The FTSE 100 Index fell around 5 per cent today as investors reacted to a third successive session of heavy losses for markets in Asia.
Japan's Nikkei fell 9.6 per cent to a five-and-a-half year low after revised earnings forecasts from electronics giant Sony fuelled fears over a global recession.
The FTSE 100 Index was in positive territory yesterday, but surrendered the gains to stand 200 points down at 3889.
CMC Markets trader Matt Buckland said: "Volatility and uncertainty seem to be the watch words at the moment.
"Asian markets have again been under pressure overnight whilst there's also a degree of concern surrounding the corporate forecasts that came out from across the Atlantic last night."
He pointed to cautious comments from Microsoft, despite the company reporting a solid first quarter trading performance with revenues up 9 per cent.
The latest slide for the FTSE 100 came as investors awaited official figures on the extent of the economic slowdown in the UK.
PA