LONDON: Britain's top share index fell on Thursday as a drop in major banking and mining stocks pushed the market down to its lowest level in more than three years.
The blue-chip FTSE 100 index fell 2.3 percent to 5,540.32 points in early session trading, marking its lowest level since late 2012. Banks were among the worst performers amid concerns about the industry's profitability in a low-growth, low-interest rate environment.
HSBC and Standard Chartered fell by around 4 percent and 6 percent respectively. Both HSBC and Standard Chartered have large operations in Hong Kong, and they bore the brunt of a sell-off on the Hong Kong stock market, which slumped on Thursday due to persistent worries about a slowdown in China.
The Chinese slowdown, in the world's second-biggest economy and a major consumer of metals and oil, has also hit the mining and energy sector.
Miner Rio Tinto fell 5.5 percent, with Rio scrapping a generous dividend payout policy, while a new fall in oil prices hit shares in BP and Royal Dutch Shell.
"The movement lower in crude oil and the ongoing concerns about the banks are hitting the market," said Beaufort Securities' sales trader Basil Petrides.
The general fears about a global economic slowdown drove investors over to the safe-haven asset of gold, and shares in gold miners such as Randgold and Fresnillo both rose to outperform the slump on the FTSE 100.
The FTSE is down by around 10 percent since the start of 2016, and some 20 percent below a record high of 7,122.74 points reached in April 2015.
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