Shares in London fell sharply during the morning following the Bank Holiday weekend reflecting major losses overnight in the US and earlier today in Asia.
Around midday the FTSE 100 had fallen 135.31 points, or 2.17%, to 6,112.63. The FTSE 250 was 202.90 points lower, or 1.19%, at 16,903.50.
Major indexes across Europe are also taking a hammering. The Dax in Germany and the Cac in France are both around 2% lower.
Miners are particularly weak, with Glencore (GLEN) down 4.9% at 141.03p, Anglo American (AAL) falling 3.72% to 713.4p and BHP Billiton (BLT) 4.06% lower at 1,086p.
The volatility on the Chinese markets continued with its main index, the Shanghai Composite, at one point being down almost 5% before ending the day 1.23% lower.
After massive falls in share prices at the start of last week there was a recovery on Thursday and Friday after China cut interest rates and injected liquidity into its banking system.
Overall, however, the Shanghai Composite ended the week over 7% lower with the authorities in China launching an investigation into what has been described in the local media as "malicious short-selling."
In the US overnight, the Dow lost 115 points to close at 16,528, the Nasdaq fell 51 points to 4,777 and the S&P 500 slipped 17 points lower to 1,972.
In Asia today, the Nikkei in Tokyo fell 724 points to 18,166 and the Hang Seng in Hong Kong lost 486 points to be at 21,185. BIGGER MOVERS
Small cap construction safety provider Latchways (LTC) soared 47.92% to 1,065p as New-York-listed MSA Safety (MSA:NYSE) bid £11.00 a share for the stock and had received acceptance from 38% of the firm’s shareholders.
Branded oven maker AGA Rangemaster (AGA) jumped 10.23% to 202p on news that US home appliances company Whirpool (WHR:NYSE) had made a counterbid for the company. It is challenging an agreed £129 million bid from fellow US outfit Middleby Corporation (MIDD:NDQ), which AGA Rangemaster is continuing to recommend to shareholders.
E&P Petroceltic (PCI:AIM) was up 15.89% to 62p on a read-through from a massive discovery by ENI (ENI:BIT) offshore Egypt which borders its 50%-owned North Port Fouad licence.
The bad weather over the Bank Holiday may have provided a boost for retailers with the analyst, Springboard, reporting that footfall at shopping centres in the UK was 6.2% higher than on the same weekend last year. Retail parks were particularly popular with an increase of 8.5% in the number of shoppers.
Figures from the European Union statistics agency, Eurostat, showed that unemployment in the region in July fell to 10.9% from 11.1% in June.
Virgin Money Holdings (UK) (VM.) dropped 3.25% to 410.8p on news that Lee Rochford is to stand down as chief financial officer (CFO) with immediate effect.
Shares in insurance claims software firm Innovation Group (TIG) nudged up 2.27% to 39.63p on confirmation of an agreed £500 million takeover by private equity firm Carlyle. The story initially broke late on Friday, sparking a big jump in the share price given the 40p per share offer.
Australian unconventional hydrocarbons company Falcon Oil & Gas (FOG:AIM) was up 7.35% to 7.38p as it revealed encouraging results from its first well – Kalala S-1 – in the Beetaloo basin.
Asset manager Henderson (HGG) continued to feel the heat of sliding equity markets, falling 6.13% to 243.5p. Dual-listed in Australia, Henderson stock had already been under pressure in the first two sessions of the week in that country.
Pest control specialist Rentokil Initial (RTO) advanced 2.29% to 151.7p as it proposed a $425 million (£276 million) acquisition of US-based Steritech. The deal would secure Rentokil’s place as the number three player in the US pest control market and remains subject to regulatory approval.
AstraZeneca (AZN) was down 1.67% at 4,051p despite agreeing a deal that will see Valeant Pharmaceuticals develop its psoriasis drug brodalumab. The Canadian company will pay $100 million upfront in a deal that includes further milestone payments.