The FTSE 100 dived to its lowest level since November 2011 after coronavirus fears drove another major sell-off, although the UK markets recovered some losses later in the session.
London's top flight closed 215.03 points lower at 5,151.08 at the end of trading on Monday.
However, markets had closed by the time the Prime Minister announced that people should avoid confined spaces including pubs and restaurants. The announcement is expected to rock the markets on Tuesday morning.
Travel and leisure firms bore the brunt of the decline on Monday, but the index made a slight recovery during the afternoon to reduce it losses, despite a frantic start to trading on Wall Street.
Connor Campbell, financial analyst at Spreadex, said: "Though the Dow Jones opened sharply lower, in a rare sight the European indices didn't double down on their own losses, instead cutting the morning session's slump in half.
"Finding a smidge more confidence that was seen at that start of the day, the FTSE managed to claw its way back to 5150 - no small feat given that at one point it was trading under 4850 for the first time in eight-and-a-half years."
The Dow Jones slipped 6% after the markets opened, as traders were shaken by Federal Reserve's move to slash interest rates to zero.
The major European markets all made recoveries after Wall Street opened, but remained heavily down for the day, as the spread of the virus continues to weigh on the global economy.
The German Dax decreased by 5.31%, while the French Cac moved 5.75% lower.
Meanwhile, sterling fell against the dollar and euro as the health crisis continues to hold back progress over Brexit negotiations.
The value of the pound fell 1.38% versus the US dollar at 1.224 and was down 1.12% against the euro at 1.097.
In company news, Travelex owner Finablr had its shares suspended and said it could go bust after discovering $100 million (£81m) of undisclosed cheques.
The FTSE 250 said its chief executive Promoth Manghat has also resigned, as the company is "unable to accurately assess" its financial position.
Halfords shares plummeted after the retailer announced plans to close its Cycle Republic chain of stores, putting 226 jobs at risk.
The retailer said it will shut all 22 outlets and its performance centre site in Evesham as it looks to focus on its online cycling business, Tredz. Shares fell 19.65p to 83.35p.
Primark owner Associated British Foods closed lower on a busy session which saw its shares suspended briefly after an anomalous trade was reported.
It came as the retail and grocery group reported that first half profits were ahead of forecasts, but it will still face significant outbreak-related headwinds. Shares fell 95p to 1,739.5p at the close of play.
Supermarket stocks outperformed the rest of the FTSE, with Ocado and Sainsbury's both closing in positive territory as demand for home deliveries continues to surge.
The price of oil was hammered again as the market continues to be dogged by concerns over demand.
The price of a barrel of Brent crude oil decreased 8.7% to $29.82.
The biggest risers on the FTSE 100 were Evraz, up 14.5p at 243.3p, Sage, up 30.8p at 612.8p, Intertek, up 234p at 4,770p, and Ocado, up 50p at 1,233p.
The biggest fallers on the FTSE 100 were IAG, down 94.6p at 255.7p, M&G, down 36.8p at 109.4p, EasyJet, down 152p at 634.8p, and JD Sports, down 95.4p at 417.2p.
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