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(Open): UK stocks fell sharply after the US central bank indicated it would start to scale back its stimulus programme later this year.
The market was also hit by figures showing a further weakening in China's manufacturing sector.
The FTSE 100 index was down 94.08 points, or 1.5%, at 6,254.74.
Mining firms were hit by the weak data from China. Shares in Randgold Resources fell 5.7% while Rio Tinto was down 4%.
Global markets have been anxiously monitoring news from the US for clues as to when the US Federal Reserve might start to slow the pace of its $85bn-a-month bond buying programme.
On Wednesday, Fed chairman Ben Bernanke said that if the central bank's forecasts were correct, it could begin slowing asset purchases by the end of 2013 and wind them down completely by the middle of 2014. However, he emphasised that the programme was tied to economic conditions.
The FTSE's fall was echoed by other major European markets. In Germany, the Dax index was down 2% while in France the Cac 40 was down 1.8%.
UK bank shares remained relatively resilient after the Prudential Regulation Authority said that five banks must plug a £27.1bn hole in their finances.
RBS shares fell 0.4%, Lloyds was unchanged and Barclays dropped 2.4%.
Among the smaller firms, shares in Ted Baker jumped 10% after the fashion retailer reported a sharp jump in first quarter sales.
On the currency markets, the pound fell 0.2% against the dollar to $1.5445, but rose 0.3% against the euro to 1.1677 euros.
Source: BBC News - Business http://www.bbc.co.uk/news/business-11899862#sa-ns_mchannel=rss&ns_source=PublicRSS20-sa
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