London stock exchange
Markets plunge on Brexit fears Getty

The London market tumbled, led by retail and housebuilding stocks as investors' confidence in UK economy remains fragile.

The FTSE 100 Index fell 98.3 points to 6447.3, with the pound falling overnight to a fresh 31-year low against the dollar adding to the gloom.

Supermarkets were among the biggest fallers after the latest research from Kantar showed that shop prices decreased to -2% in June compared to a year ago, raising the prospect of further profit margins erosion in this sector.

Tesco tumbled 16.2p to 159.2p, Morrisons fell 12.9p to 173.2p and Sainsbury's was 9.2p lower at 213.7p.

Housebuilders also suffered as traders fear that this market will be hit hard if the UK economy slows down in the wake of the Brexit vote.

Barratt Developments fell 15.3p to 335p and Taylor Wimpey slipped 5.2p to 116.1p.

Prudential-owned M&G Investments became the third investment management firm to suspend trading in Britain's biggest commercial property fund following the UK's vote in favour of leaving the European Union. Shares in Prudential fell 58p to 1145.5p.

Spreadex financial analyst Connor Campbell said: "After a poor start the markets looked increasingly uglier as Wednesday progressed."

In afternoon trading the biggest risers in the FTSE 100 Index were Fresnillo (+7.2% to 2030p), Randgold Resources (+3.3% to 9620p), Mediclinic International (+1.2% to 1113p), Shire (+0.8% to 4802p) and Hika Pharmaceuticals (+0.7% to 2561p)

The biggest fallers in the FTSE 100 Index were Tesco (-9.4% to 159.2p), International Airlines Group (-7.2% to 351.4p), Morrisons (-6.8% to 173.2p), Aviva (6.2% to 352.6p) and Royal Bank of Scotland (-5.9% to 149.2p).

In afternoon trading the biggest risers in the FTSE 250 Index were Centamin (+9.1% to 160.3p) Hochschild Mining (+8.8% at 220.6p), Acacia Mining, (+6.4% to 529.5p), Vedanta Resources (+4.6% to 444.6p) and Polymetal International (4.3% to 1130p).

The biggest fallers in the FTSE 250 Index were Tullow Oil (-15.5% to 203.4p), CLS Holdings (-8.7% to 1210p), Clarkson (-8.1% to 1649p), Metro Bank (-7.1p to 1583p) and Sophos Group (-6.8% to 202p).