Markets plunged into the red across the globe over concerns that rising coronavirus case numbers in the UK, mainland Europe and the US will damage the global economic recovery.
The FTSE 100 slid to its lowest level for six months on the back of mounting numbers of infections and admissions to hospital in the UK.
Traders were also particularly shaken by speculation of looming restrictions in France and Germany which weighed on sentiment throughout the day.
London's top flight closed 146.19 points lower at 5,582.8 at the end of trading on Wednesday.
Connor Campbell, financial analyst at Spreadex, said: "As a kind of nightmarish roll call, you have: an impending national lockdown in France, a likely 'lockdown light' in Germany, the kind of numbers that would justify a 'circuit-breaker' in the UK, and half-a-million Covid-19 cases in the last week in the USA.
"This is not to mention comments from the UK Vaccine Taskforce, claiming - obviously, but no less dishearteningly - that the first batch of vaccines 'is likely to be imperfect'.
"And that's just the pandemic - you've also got the lack of pre-election stimulus over in the States, and what that will mean for the short-term hopes of a package if Joe Biden dethrones Donald Trump."
The Dow Jones plunged 860 points to a near three-month nadir just above 26,600 as pre-election caution from earlier in the week descended into turmoil.
The US bloodbath tightened the screws on already dire performances for European stocks, pulling the German and French indices to heavy falls.
The German Dax decreased by 4.42%, while the French Cac moved 3.69% lower.
Oil prices also dived as worries over tightening global lockdowns drove fears among traders that demand will substantially weaken.
The price of a barrel of Brent crude oil decreased by 5.03% to 39.09 US dollars.
Meanwhile, sterling slumped as cautious traders moved to the US dollar, which has been a safe haven for investors throughout the pandemic.
The pound fell by 0.51% versus the US dollar at 1.297 and was down 0.19% against the euro at 1.104.
In company news, Rolls-Royce shares fell by 60% on Wednesday after shareholders in the engine maker voted in favour of a £2 billion rights issue.
The FTSE 100 firm saw its shares tumble to its lowest price in 15 years after the move, which was designed to unlock around £5 billion in extra liquidity. Shares closed down 134.46p at 84.54p.
Aston Martin closed in the green after it completed a refinancing package which will see Mercedes-Benz expand its investment in the UK luxury car maker.
It finished 0.5p higher at 55p at the close of play.
Metro Bank sank by 1.48p to 60.52p after it said that Goldman Sachs has reduced its stake in the challenger bank to 2.6%.
David Beckham-backed Guild Esports also tumbled on Wednesday after a rough first month of trading which has seen it lose around a third of its value since floating. It closed down 0.85p at 5.15p.
The FTSE 100's four risers were Admiral, up 24p at 2,781p; Next, up 44p at 6,134p; Ocado, up 1p at 2,313p; and B&M, up 0.2p at 488.1p.
The biggest fallers of the day were Rolls-Royce, down 134.46p at 84.54p; Fresnillo, down 75.5p at 1,160.5p; Polymetal, down 98.5p at 1,668p; and Informa, down 23.5p at 424p.
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