FTSE down 75 points
Fears over Europe's debt plight resurfaced today as world markets cooled their initial enthusiasm over China's decision to let its currency rise.
Miners gave up their gains seen yesterday, while banks were lower after a ratings downgrade on BNP Paribas revived worries that Europe's sovereign debt mountain will slow growth and undermine the financial system.
Tax rises and spending cuts in British Chancellor George Osborne's emergency budget also weighed in London as the FTSE 100 Index slumped 75.1 points to 5224.
BP showed no signs of improvement after its 50% share price drop since the Deepwater Horizon explosion in April.
The stock was down another 10.75p to 338.75p, but other commodity stocks were also under pressure as Royal Dutch Shell fell 34p to 1750p and Cairn Energy dropped 16.7p to 428.2p.
BG Group fell 42p to 1083p after Goldman Sachs downgraded the stock from buy to neutral and noted the potential for delays in key development projects.
The impact of Beijing's move to determine its exchange rate from multiple currencies, offering a potential boost to the global economy, started to fade as miner Xstrata dropped 37.5p to 1038.5p and Kazakhmys fell 41p to 1194p.
Banks were also under pressure following the Fitch downgrade on BNP Paribas and falls for other big names in Europe, such as Santander.
Barclays was the biggest casualty in London with a drop of 12.4p to 304.7p, while Royal Bank of Scotland declined 1.1p to 45.6p and Lloyds Banking Group fell 0.9p to 55.8p.
One of the biggest moves of the session came from leisure group Whitbread after it reported a strong performance from its Premier Inn hotels chain.
Premier's like-for-like sales jumped 10.5% in the first quarter as the division benefited from increased marketing and the roll-out of more value-for-money weekend offers.
Whitbread shares were at the top of a shortened Footsie risers board with a gain of 39p to 1517p.
Outside the top flight, military supplies firm Chemring dropped 7% after its half-year earnings report disappointed analysts. It saw a 7% rise in profits to £42.3m (€50.7m) and a 25% improvement in its order book to £751m (€901.m), but analysts were disappointed by the absence of any other positive surprises. Shares were 224p lower at 3086p.
Triton showers firm Norcros rose 0.25p to 7.75p despite posting a 19% fall in profits and warning that market conditions were likely to be hit by British government belt-tightening.
