UK equity markets ended the first session of the week firmly on the back foot as the FTSE 100 tumbled to its lowest level in over two weeks amid fresh concerns over the state of the global economy.
London's blue chip index closed down 2.71% to 5,689.36 followed suit by its European counterparts, with Germany's Dax and France's CAC 40 fell 3.30% and 3.20% respectively, while the Pan European Stoxx 600 tumbled 3.54%.
Markets in China, Hong Kong and South Korea were closed for the Lunar New Year holiday but even without the volatility normally provided by the Shanghai Composite Index, European markets had little to cheer about.
"Chinese investors will feel relieved that their market has taken the week off, but the absence of the volatility provided by Shanghai sends a worrying message – investors in the US and Europe are worried by many things, not least the current interest rate outlook in the US," said IG's senior market analyst Chris Beauchamp. "Recent surveys of fund managers may indicate rising cash balances, but so far these appear to be remaining on the side lines, pulling the rug from under what remains of this bull market. In a week when economic data is relatively light, it is becoming increasingly apparent investors are struggling to find any positive news on which to create a rally."
The FTSE 100 saw losses across the board, with ITV among the five worst performers on the index after Deutsche Bank's analysts warned the broadcaster was lagging behind the rest of the sector.
Housebuilders Taylor Wimpey and Berkeley Group Holdings both lost almost 8%, while Randgold Resources was the standout winner of the day after the gold explorer lifted its dividend and reported record levels of production for 2015.
Among FTSE 250 stocks, energy services provider Wood Group and online grocery retailer Ocado both suffered heavy losses. The former saw its rating downgraded from 'neutral' to 'sell' and its target price cut from 639.6p to 517.6p by analysts at Goldman Sachs, while the latter was hit by a negative review from analysts at Barclays, who claimed the company was still some way off from signing a proposed deal with a big international partner.
"Although we expect that the signing of a deal with a credible partner would be a considerable boost for sentiment, we are also a little wary of assuming that this would answer all the market's doubts," they added.
FTSE 100 - Top 5 risers
Randgold Resources Ltd.+12.92%
Anglo American +3.62%
Imperial Brands +1.30%
FTSE 100 - Top 5 fallers
Worldpay Group (WI) -8.55%
Berkeley Group Holdings -7.73%
Ashtead Group -7.37%
FTSE 250 - Top 5 risers
Acacia Mining +4.02%
Nostrum Oil & Gas +3.02%
Circassia Pharmaceuticals +1.78%
Riverstone Energy Limited +1.53%
FTSE 250 - Top 5 fallers
Sophos Group -11.26%
Just Eat -10.04%
Wood Group -9.75%
Auto Trader Group -9.15%
BGEO Group -8.92%