EmailLeading shares fell back for the third day running, with the FTSE 100 hitting levels not seen since April.
The FTSE 100 finished at 6557.52, down 65.20 or 0.98%, as the wealth of bad news continued to unsettle investors. As well as the continuing concerns about the repercussions of protests in Hong Kong and the air strikes on Isis, there were renewed signs of weakness in the global economy from the latest purchasing managers manufacturing surveys. Data from China, the UK, Germany and the US all disappointed investors, ahead of the key European Central Bank meeting on Thursday and US non-farm payroll figures on Friday.
The slide accelerated during the afternoon as Wall Street reacted badly to news of the first positive diagnosis of the Ebola virus in the US.
Airline shares came under pressure on fears the spread of the disease could hinder air travel, with British Airways and Iberia owner International Airlines Group down 9.9p to 357.2p and easyJet, 27p lower at £13.96.
Mining shares fell back after the data from China, a key consumer of commodities, showed a flat performance from the manufacturing sector in September. Anglo American lost 20.5p to 1363.5p and Antofagasta was 19p lower at 702p.
Tuesday's plunge in the oil price - linked to the continuing strength of the dollar in the expectation of US interest rate rises - has also affected others in the commodities sector. Despite Brent crude recovering 1% to $95.6 a barrel, the recent falls below $100 have unsettled investors in oil companies. So Tullow Oil slipped 13.5p to 631p while Royal Dutch Shell A shares dropped 27.5p to £23.31.
BG fell 47p to £10.93, not helped by Credit Suisse cutting its price target to £10.50 from £11.15 and warning of the production risks in Brazil and Australia.
But none of this has stopped talk of consolidation in the sector. US coal giant Walter Energy was rumoured to be in the sights - again - of BHP Billiton, down 24.5p at 1690.5p, or Rio Tinto, 11.5p lower at £30.20. In 2012 BHP was said to be mulling a $55 a share bid, but now the purported price was just $5 a share, still double the current market price.
Supermarkets continued to be out of favour. J Sainsbury lost 17.5p to 234p after it cut its full year sales forecast and said it would assess its dividend policy as part of a strategic review.
Tesco fell 6p to 180.2p after it said the Financial Conduct Authority had launched a full investigation into the accounting scandal at the supermarket.
Morrisons was also down, 8.4p lower at 159.9p although 4p of that was due to the shares going ex-dividend.
Brenda Kelly, chief market strategist at IG, said:
Stock markets are selling off fast as the first day of October gets off on the wrong foot...Global indices are in retreat as confidence in the world economy evaporates and investors pull back their positions ahead of major events in Europe and America this week. Across Europe eyes have turned to the ECB meeting tomorrow. The data points to a need for central bank action but the reaction in markets seems to indicate that there are a lot of worried people out there, worried because of the fear that the ECB will do little beyond fine words. In the UK there is plenty to be concerned about too – manufacturing is weaker, Sainsbury's sales are diving and the FCA has turned its focus on to Tesco. The feelings have manifested themselves in steep losses on the FTSE 100, and until some positive news emerges from somewhere the selling is likely to continue.
But following its recent falls, Royal Mail recovered 7.5p to 399.7p as UBS raised its recommendation from sell to neutral with a 400p price target,
Among the mid-caps, events company UBM dropped 34.5p to 548.5p after it said it would buy US trade show organiser Advanstar Communications for $972m, funded by a £563m ($912m) cash call.
But estate agency group Countrywide climbed 16.6p to 468p as it unveiled a share buyback programme for up to £20m.
Oil and gas producer Afren added 5.9p to 109.4p after it said late on Tuesday that an independent review revealed no further unauthorised payments, following a review which began in July.
Lower down the market Graphene NanoChem jumped 7.125p to 45.25p after announcing a second order for its product line for the oilfield chemicals market.
Finally, broker Daniel Stewart saw its shares suspended at 0.35p after it said it had been unable to publish its annual accounts within the six month time limit required by Aim.
The company - a nominated advisor itself to many Aim companies and with 800,000 private clients - said in July it would make a loss for the year but had seen an improvement in the second half. It added then:
The first quarter, to 30 June 2014, saw a further improvement in activity during which we completed a number of small secondary fundraisings. Our current pipeline gives us encouraging visibility through the remainder of the half year, subject always to the successful completion of these opportunities.
