The FTSE 100 tumbled nearly 2% in morning trading after the US Federal Reserve spooked markets yesterday by warning it may slow its asset purchase programme.
London's blue chip index pulled back from five-year highs, falling as much as 118 points to 6,277 points. The index stood down 1.7% at 6,289 shortly after midday.
Miners were the main drag on the index as investors sold the highly cyclical stocks, with Kazakhmys, BHP Billiton and Xstrata all off between 4.4% and 3.3%.
The drop comes after the FTSE 100 hit a new multi-year peak yesterday above 6,400.
Markets were spooked after the release of minutes from the latest Federal Reserve meeting, published overnight, showed the Fed may slow or halt its asset purchases before employment picks up.
Other markets also reacted badly to that suggestion as investors took profits after the recent run higher, with the French CAC and German DAX down 1.6% and 1.7% respectively.
US markets, which closed lower last night, are also set to open lower later this afternoon.
Elsewhere, the pound dropped again, falling to a two and a half year low versus the dollar, falling to $1.5132, its lowest level since July 2010.
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