FTSE 100 slumps on weak bank shares
(Close): Shares in London closed with sharp losses as bank shares weighed on the FTSE 100 index.
The FTSE 100 finished 2.7% lower at 5,689 points as analysts said investors were turning against financial shares because of shaky global growth.
HSBC closed 4% lower, Lloyds Banking Group fell 3.5% and RBS ended down 4.6%.
European banks were also hit hard.
Owen Callan, senior analyst at Cantor Fitzgerald, said: "People are worried about the global economy and particularly now we are beginning to look at the banks. You are seeing more and more people saying: is this 2008 again? Maybe not quite as severe, but do we need to be worrying about the banking sector and risk assets on a bigger level?".
Miners continued higher, building on some impressive gains last week. Randgold was the best riser on the FTSE following strong results, jumping 13.2%.
Engine maker Rolls-Royce fell 2.8% as traders speculated it was on the brink of cutting its dividend. It has issued a series of profit warnings in recent months and is due to release results on Friday.
dAdvertising giant WPP was down 5.3% on fears about the outlook for worldwide advertising revenue as economic growth slows.
Chip maker Arm Holdings was down 5.8% after brokers stated their "neutral" view of the stock.