London's blue-chips were on the back foot today as global recession fears hit mining stocks and dragged banking giant HSBC deep into the red.
The FTSE 100 Index followed a 5 per cent fall on Friday with a further plunge into the red - hitting lows not seen since March 2003 at one point.
But by the mid-afternoon, the top-flight had cut its losses to stand just 0.5 per cent down after a better than feared opening on Wall Street.
The London market was wrongfooted in early trading by overnight declines across Asian exchanges. Japan's Nikkei 225 Index fell 6.4 per cent to its lowest close since 1982, while Hong Kong's Hang Seng tumbled 13 per cent.
The sharp declines came as South Korea's central bank made its biggest ever rate cut to prevent Asia's fourth-largest economy from lurching into recession, while Australian and Hong Kong central bankers also injected funds into their markets to ensure liquidity.
The Asian woes put the spotlight on banks HSBC and Standard Chartered today. Both banks - among the least scarred of the UK's banks so far in the current turmoil - have a major presence in the region.
But HSBC lost more than 5 per cent or 39.5p to 656.5p and Standard Chartered shed 34p to 724p after heavy falls on Friday as it became clear emerging markets are not immune to the global financial crisis.
This contrasted with HBOS and its white knight merger partner Lloyds TSB - enjoying a rare day of gains today - up 5p at 64.9p and 9.5p at 175.3p respectively.
Miners however dragged on the Footsie as concerns over global demand grew, with Eurasian Natural Resources the leading Footsie faller. The share fell 31.5p to 297.5p, closely followed by Anglo American, which shed 96p to 1151p.
Housebuilders in the FTSE 250 meanwhile were on the up after upgrades from Merrill Lynch offset Persimmon's news of a further £600m in landbank writedowns as house prices continue to fall.
Persimmon gained 8.75p to 226p, as it also said full-year results would be in line with expectations. Barratt Developments was the biggest second tier riser at one point with a 9 per cent rise, but gave back the advance to stand 0.5p better at 51p.
Automotive and aerospace engineer GKN meanwhile plummeted 23 per cent, or 27.5p to 90p after it warned over profits and announced plans to cut its global workforce and shut down plants.Reuse content