Worries over the state of the global economy and America's crippling debt deadlock hammered stock markets and pushed the FTSE 100 Index to a three-month low.
An upgrade to Britain's growth prospects by the International Monetary Fund (IMF) was more than offset by its warning that a slowdown in emerging markets will weigh heavily, as it downgraded global growth prospects to just 2.9% this year.
The FTSE 100 closed down 71.5 points at 6365.8, a 1.1% fall, while bourses in Europe also lost ground despite the IMF now saying the eurozone will shrink by less than expected this year.
The IMF called for America to "promptly" raise its debt ceiling deadline, as the impasse ensures a partial government shutdown drags on. There are fears that Congress will not meet a deadline of October 17 to approve additional borrowing, resulting in the spectre of the world's largest economy defaulting on its debt.
Retailer Marks & Spencer was among the heaviest top flight fallers in London amid mounting worries that its star-studded clothing relaunch is falling flat.
Shares in the retail giant were down 3.4%, after shedding almost 3% on Monday, as new market share data poured doubt on its clothing turnaround and City analysts downgraded its prospects.
Figures from Kantar Worldpanel showed M&S's share of the womenswear market fell further in the 24 weeks to the end of August, while analysts at Deutsche Bank and Credit Suisse cut general merchandise forecasts for the chain to negative for the three months to the end of September. Its shares were another 16.5p lower to 463.8p, after hitting a five-and-a-half year high last month.
Broadcaster ITV was near the top of a shortened FTSE 100 risers board, as its shares closed at 183.6p, a rise of 1.8p in the session.
The company behind Downton Abbey and Coronation Street is benefiting from chief executive Adam Crozier's drive to offset volatile advertising markets through spending on original TV content.
Persimmon was a rare climber among housebuilder in a lacklustre session for the sector, despite lenders launching new mortgage products backed by the Government's Help to Buy guarantees.
Taxpayer-backed Royal Bank of Scotland and its subsidiary NatWest, as well as Halifax, part of the Lloyds Banking Group, began publishing details of deals under the scheme.
Persimmon advanced 10p to 1077p, but Barratt Developments slipped 1.1p to 308.9p in the FTSE 250, and Bovis Homes shed 6p to close at 700.5p.
The biggest risers on the FTSE 100 were Antofagasta, up 13p to 833.5p, Fresnillo, 11p stronger to 942.5p, ITV and Persimmon. The biggest fallers were Travis Perkins, down 62p to 1578p, Marks & Spencer, Standard Life, 10.4p weaker to 341.1p and Mondi, down 27p to 1038p.
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