FTSE tumbles two percent

Britain's top share index tumbled more than 2 percent amid a global sell-off on Tuesday, with banks and miners worst hit, after a drop in China's main index spooked investors. In the index's largest percentage drop in a single day since June 8, 2006, when it shed 2.5 percent, the FTSE 100 ended down 148.6 points, or 2.3 percent, at 6,286.1.
Miners took seven places in the list of top 10 losers, hurt by China fears and as copper prices eased. Xstrata plunged almost 6.7 percent, Lonmin and BHP Billiton both fell 6.2 percent, and Antofagasta gave up 5.6 percent.
China's Shanghai Composite dropped almost 9 percent, its biggest decline in a decade, amid fears that Chinese authorities would crack down on stock market speculation.
European and US equities suffered in turn, not helped by a US government report showing manufactured durable goods orders fell by a larger-than-expected 7.8 percent in January.
"This sort of move by the market is a little worrying, and it looks like it has been caused by a build-up of concerns in recent days," said Angus Campbell, a trader at CMC Markets. "Memories of last May's correction have sent shivers through investors' spines as many market participants have used futures contracts to run for cover."
In the oil sector, BP lost 1.8 percent and BG Group eased 1.8 percent as US crude oil prices fell below $61 a barrel. Oil declined after the fall on China's stock market, as well as on the back of the increasingly tense stand-off over Iran's nuclear ambitions and after a further fall in US fuel inventories.
Standard Chartered Bank fell 3.9 percent, despite narrowly beating analysts' expectations with a 19 percent rise in 2006 profits, as analysts said investors were wary about the emerging market-focused bank's growing costs.
Barclays lost 2.8 percent, HSBC dipped 1.1 percent, and HBOS slipped 1.5 percent. Reuters, the only FTSE 100 stock in positive territory, rose 1.4 percent after Credit Suisse upgraded the financial news company to "outperform" from "neutral" and raised its price target.
Among mid-caps, Avis Europe nose-dived 14.6 percent after the car renter dropped its forecast for margin improvement announced in 2005, saying the market conditions had remained more difficult than it assumed two years ago.
GKN, however, surged 9.4 percent after the British engineer said the outlook for its major markets was positive, despite uncertainty about North American demand, as it posted annual profit at the top end of forecasts.
"What a session. A stock exchange fall-out in Shanghai, indifferent data on inflation and durable goods exacerbating the downbeat sentiment of a creaking economy ... and geopolitical threats from Iran," said David Buik of Cantor Index. "That all looks like a very intoxicating cocktail of despair indeed," he said.