The FTSE 100 Index is down 95.3 at 4324.8 after an hour's trading, adding to yesterday's 122 point decline.
That is below the five-year low closing point recorded last week.
The last time the Footsie closed below 4324 was on April 10th, 1997.
Investors are continuing to worry over accountancy standards in the US.
Last night, the Dow Jones Industrial Average closed below the 9,000 barrier after a 3 per cent fall.
This followed broker downgrades on General Motors and Ford and further general accountancy worries.
Telecoms stocks are suffering in London trading, with Vodafone down 1¾p to 86½p; mmO2 losing ¾p at 44¼p; BT Group down 5¼p to 244¼p; and Cable & Wireless off 3½p at 167½p.
Warnings from two big names outside the FTSE 100 are doing little to lift the mood.
Shares in JJB Sports are down more than 25 per cent or 79p to 232½p after it reported like-for-like sales growth of just 1 per cent, and said half-year profits would be hit as a result of the sales pressure.
PA