The FTSE 100 share index fell 184.9 points to 6,191.6 on Tuesday (down 2.9 per cent).
Banks all fell, with Barclays down 1.1 per cent, HSBC falling 2.3 per cent, Lloyds TSB down 1.4 per cent and Standard Chartered down 2.6 per cent.
Miners had a particularly bad day with Anglo American, Antofagasta, BHP Billiton, Eurasian Natural Resources, Kazakhmys, Lonmin, Rio Tinto, Vedanta Resources and Xstrata all falling 4.5-7.9 per cent.
Oil firms BP and Royal Dutch Shell also dropped around two per cent each.
Other losers of the day included Marks & Spencer, down five per cent, Imperial Tobacco, down 6.2 per cent, ICAP, down 6.5 per cent and Yell who dropped a massive 26.3 per cent.
There were some gainers, British Land rose 1.1 per cent and Mitchells & Butlers increased 4.3 per cent.