Britain's leading stocks fell 2 per cent on at opening, led lower by weak transport and banking stocks after the US-led military strikes against Taliban targets in Afghanistan.
News that railway operator Railtrack had gone into administration and that shares had been suspended hit confidence in transportation stocks.
"Clearly when you have the failure of a former FTSE 100 company and the start of a conflict that looks like it could develop into a long one there's inevitably going to be some weakness", one analyst said.
By 9.40 a.m. the FTSE 100 was down 100.2 points at 4,935.8. The index fell as low as 4,902.7, pulling back from Friday's close of 5,036.0 points, which was its highest close for three weeks.
Transportation stocks fell after news that Railtrack, the owner and operator of the country's creaking rail network, had been put into administration after the government turned down its latest request for state aid.
Shares in the company have been suspended at Friday's closing price of 280 pence.
Dealers said the suddenness of the government's action was a surprise and had angered Railtrack investors and other market observers.
Telecoms, oil and pharmaceuticals stocks were also all weaker in the broad-based decline. Engineering and electronics firm Invensys was one of only six FTSE 100 stocks to rise, after it said its first-half operating profits were in line with a profit warning it gave in July. Invensys shares were up 5 pence, or 11.4 per cent, at 49p.