The Footsie has seen stg£48 billion wiped off the value of shares as it responds to another dismal session on Wall Street.
The FTSE 100 Index closed down 199 points at 4098.3.
Only two blue-chip shares finished in positive territory but few in the City were surprised at the downturn.
Already weak sentiment was dented by a dismal performance on Wall Street, with the Dow Jones Industrial Average off 249 points by London's close and the tech-laden Nasdaq also trading lower.
GlaxoSmithKline shed 79p at stg£11.29 while rival AstraZeneca fell 219p at stg£21.55. Both are due to post second-quarter figures next week.
Other heavyweights heading south included BP and Shell, down 30½p at 464½p and 14½p at 419p respectively, while financial stocks remained under pressure.
Schroders NV fell 83p at 425p, Amvescap lost 31½p at 475p, Barclays was 30p weaker at 469p and Lloyds TSB dropped 33p at 592½p.
Abbey National was one of the few stocks to gain during the day after news that under-pressure chief executive Ian Harley had stepped down. But it was unable to hold onto the improvement and closed 2p adrift at 695p.
Vodafone shed 5½p at 94½p, mmO2 was off 1¼p at 47¾p, BT fell 18¾p to 232½p and Cable & Wireless closed 3½p weaker at 172¼p.
PA