The FTSE slumped more than 100 points and is threatening to fall through the 5,000 barrier in Friday trade as it continues to be battered by global concerns over the economy and debt issues in Greece and Portugal.
London's blue-chip index fell 102.84, or 2% exactly, to 5,036.53 by shortly after 11am.
It closed Thursday down 2.17% to 5,139.31 as the impact of disappointing US jobless figures and mounting concerns over debt issues in Greece and Portugal reverberated around the globe.
The Dow Jones dropped below the critical 10,000 mark yesterday, but eventually closed down 268 points at 10,002. Meanwhile, the Nasdaq fell 65 to 2,125 while the S&P 500 dropped 3.1% to 1,063.
Oil and commodity prices slumped with copper prices declining to a three-month low and the price of crude down almost $4.
The global sell-off also hit Japan with the Nikkei 225 dropping to its lowest close in almost two months, down 2.9% to 10,057.09.
Yen appreciation against the dollar and the euro hit exporters such as Panasonic, which gets 23% of its overseas sales in Europe, and it fell 3.1%. Honda also dropped 3.7% while Mitsubishi sank 3.3%.
Electronics interdealer broker ICAP has taken the biggest hit in early trade, plunging 66p, or more than 18%, to 298.9p.
Vedanta Resources, Schroders and Lloyds Banking Group are all about 5% down.
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