Leading shares are heading sharply lower for the third day running as the crisis in the Eurozone showed signs of running out of control.
Banks and mining groups - the key sectors for investors to avoid when risk is off the table - are among the main victims of the sell-off.
Ahead of the results of the Euro banking stress tests - which are likely to satisfy no one since if they look good there will be doubts about their methodology - Barclays is down 12.6p at 221.35p. Lloyds Banking Group is 1.955p lower at 42.89p and Royal Bank of Scotland is off 1.17p at 34.55p.
If the Eurozone debt problems moves from Greece to Italy and even Spain, all bets are off, including how badly the banking system would be damaged by the crisis. Kathleen Brooks at Forex.com said:
It's now easy to imagine the worst case scenario: if we continue to have intense days of selling in the Italian and Spanish bond markets then the third and fourth largest economies in the Eurozone may have no choice but to apply for bailout funds and withdraw from the capital markets altogether.
The markets have no faith that the Eurozone has a mechanism to deal with this crisis. Yet again the EU is rolling out the big names to say that the "stability of the Eurozone is key" etc. etc. The market isn't buying this. The [current] Ecofin meeting needs to come up with:
1, Clarification on the involvement of private sector investors in a second Greek bailout. That is, debt rollovers, forced debt swaps etc.
2, Whether the ECB will step in and buy Greek bonds (how about Spanish and Italian too) to relieve pressure on yields.
Sentiment has not been helped by the EU admitting Greece might default of some of its debts, nor by comments from the IMF casting doubt on a second bailout for the country.
So ahead of the UK inflation figures, the FTSE 100 is now down 112.46 points at 5816.70, having fallen as low as 5793. In the previous two days of trading, the leading index had already lost around 120 points.
Miners are suffering from worries about global demand for commodities, with Xstrata down 43p to £13.23.